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Warrant Issued For Arrest of Matthew Weidner In a Foreclosure Case
March 5th, 2010 · Foreclosure On March 1, 2010 a warrant for my arrest was signed by a Pinellas County Judge. The warrant was signed based on an affidavit of probable cause that was signed by an officer of the private company that the Pinellas County Sheriff’s office has contracted to process all their probable cause affidavits and arrest warrants. For hundreds of years, only actual deputized officers of the Sheriff’s office signed these affidavits and they were kept within the Pinellas County courts, but that process was recently contracted out to a private company. When I appeared before the judge, I reviewed the affidavit and it was clear that whomever signed the affidavit got the facts all wrong. I’m 175 pounds, not 204. I’ve got brown hair, not white hair. I’ve got blue eyes, not brown eyes. And most importantly, I couldn’t have committed the serious felony crime the affidavit accused me of because I wasn’t even born yet on the date the affidavit said I committed the crime. When I appeared before the judge and pointed all this out her response was astonishing…while she admitted that the affidavit was totally wrong and that it was clear from its face that I could not have committed the crime, she told me, “The prosecutor admits that the affidavit is wrong and while you may not have committed this specific crime, the affidavit says you committed a crime. The prosecutor assures me that they believe you’ve committed a crime even if it’s not the crime that I’m going to sign this arrest warrant for and that’s enough information for me.”

The judge signed the arrest warrant even though she knew and the prosecutors admitted that the facts in the affidavit did not support my arrest. There were hundreds of attorneys in the courtroom who had clients that were being arrested on precisely the same obviously wrong set of facts, but they could do nothing. The facts were all wrong, the files were all wrong, but the warrants were signed. If this weren’t bad enough, I thought about the thousands of files on the judge’s bench where no attorney were present. She was so busy and those accused had no attorney to challenge the facts in the affidavit, so the judge just signed thousands of those cases every single day. Sorry lenders, sorry plaintiff’s attorneys, I was not arrested. The story above did not happen. Not exactly that way anyway. But every single day in courtrooms all across this country, acts no less severe than the ones I described above are happening. While an arrest is the most serious exercise of judicial power, close behind it is the judicial act of throwing a person or family out of their home. Unfortunately, this dire judicial act is being done hundreds of thousands of times across the country every day based on fraudulent information and based on facts that are in direct contradiction to taking that most severe judicial act–throwing a person out of their home. We truly are living in a Kafaka-esque world where this scenario above plays out in courtrooms across the country every day. Lenders and their attorneys are committing gross fraud on the courts. The practice is shockingly widespread and pervasive. The lies and tactics employed by the banks and officers of the court to fulfill their ultimate goals of taking back property (to what end? who will buy them? how will the banks recover $ $ even after they have taken the property back?) are becoming very well documented in depositions, SEC filings, class action lawsuits and other definitive places. There are bright spots though….the Sixth Circuit of Pinellas County, Florida and the Second District Court of Appeals in Florida is one such place. The recent opinions released by judges from these two courts make it clear that the judges take their jobs and their solemn responsibility to their citizens seriously. The opinions that force lenders to prove their right to foreclose and challenge the improper tactics of the banks and lenders, make it clear that in their courtrooms and neighborhoods at least, the law and the rights of consumers and citizens are more important than the arrogance, bullying and abuses of nameless, faceless, shifting entities that are attempting to steal our country! We can only hope that courts in the rest of the country will turn their gaze to Pinellas County, Florida…. The Flames of Justice Are Burning Bright! → 4 CommentsTags:affidavit fraud·bac funding·foreclosure fraud·matt weidner·pinellas county·second district court of appeals·sixth circuit·verizzo

Another Order Dismissing Foreclosure- Judge Jirotka 6th Circuit Pinellas County
March 4th, 2010 · Foreclosure Attached here is the latest example of a Pinellas County Circuit Court judge applying the law and sticking up for the rights of homeowners and consumers. The pattern in Pinellas County, Florida is becoming clear…..the judges here “get it” and are not afraid to issue correct legal decisions–despite the fact that the consequences for banks and their bad behavior is going to be significant. Read the decision and contact me with questions….these favorable decisions should be cited early and often! → No CommentsTags:Foreclosure·George Jirotka·lost note·pinellas county

A Crystal Clear Explaination of Foreclosure FraudSchenider v. Deutsche Bank Class Action
March 4th, 2010 · Foreclosure Sometimes lawyer types talk all lawyerly when we’re trying to make the case that the lenders don’t have the right to proceed against our clients…..that causes “normal” people and even judges to glaze over with a “what?” or “duh?” expression on their face. The class action lawsuit attached here, Schneider v. Duetsche Bank is a wonderful, easy to understand explanation of what’s going major wrong in the reckless pursuit of foreclosure cases across the country. Among the most damming allegations: Widespread assignment fraud; Widespread notary fraud; Deceptive and unfair practices; Widespread pleading fraud; This suit is the tip of the iceberg and when discovery is conducted all the world will see examples of the problems they plead. Any person named as a defendant in a suit by Deutsche Bank should contact the firms involved for inclusion in this suit! → No CommentsTags:assignment fraud·capacity·deutsche bank·docx llc·foreclosure fraud·Graham L. Newman Richard A. Harpootlian·Howard A. Janet Janet·Jenner &

Suggs·LLC·lost note·Lynn Ellen Szymoniak The Szymoniak Firm·matt weidner·MERS·P.A·securitized trust·usbank

Florida Second DCA Reverses Summary Judgment in Foreclosure
March 3rd, 2010 · Foreclosure Apparently the Second District Court of Appeals is serious about enforcing and applying the law. Attached here is a reversal of summary judgment that a Manatee County Court entered. The issues warranting appeal were the failure of the Plaintiff to provide the documents that supported the Summary Judgment more than 20 days before the hearing, and the inconsistency between the pleadings and the documents. It’s fantastic to see the Appellate courts applying the law….this is trickling down and soon summary judgment will be the exception rather than the rule! → 2 CommentsTags:foreclosure sarasota·matt weidner·verizzo v. Bank of New York

Fantastic Explanation of MERS- More Judicial Cracks Appear!
March 2nd, 2010 · Foreclosure As a homeowner begins research into the lending and foreclosure crisis, there will be many unfamiliar terms, names and companies that come to their attention. Chief among these will be MERS. MERS is the acronym for Mortgage Electronic Registration Systems. It is a national electronic registration and tracking system that tracks the beneficial ownership interests and servicing rights in mortgage loans. The MERS website says: “MERS is an innovative process that simplifies the way mortgage ownership and servicing rights are originated, sold and tracked. Created by the real estate finance industry, MERS eliminates the need to prepare and record assignments when trading residential and commercial mortgage loans. “ In simple language, MERS is an on-line computer software program for tracking ownership. MERS was conceived in the early 1990’s by numerous lenders and other entities. Chief among the entities were Bank of America, Countrywide, Fannie Mae, Freddie Mac, and a host of other such entities. The stated purpose was that the creation of MERS would lead to “consumers paying less” for mortgage loans. Obviously, that did not happen.

This article will attempt to explain MERS in very general detail. It will cover a few issues related to MERS and foreclosure, in order to introduce the reader to the issues of MERS. It is not meant to be a complete discussion of MERS, nor of the legal complexities regarding the arguments for and against MERS. For a more in depth reading of MERS and findings coming out of courts, it is recommended that the reader look at Hawkins, Case No. BK-S-07-13593-LBR (Bankr. Nev. 3/31/2009) (Bankr. Nev., 2009) . It gives a good reading of the issues related to MERS, at least for that particular case. Though in Nevada, it is relevant for California. (Please note. I am not an attorney and am not giving legal advice. I am just reporting arguments being made against MERS, and also certain case law and applicable statutes in California.

The MERS Process
Traditionally, when a loan was executed, the beneficiary of the loan on the Deed of Trust was the lender. Once the loan was funded, the Deed of Trust and the Note would be recorded with the local County Recorder’s office. The recording of the Deed and the Note created a Public Record of the transaction. All future Assignments of the Notes and Deed of Trust were expected to be recorded as ownership changes occurred. The recording of the Assignments created a “Perfected Chain of Title” of ownership of the Note and the Deed of Trust. This allowed interested or affected parties to be able to view the lien holders and if necessary, be able to contact the parties. The recording of the document also set the “priority” of the lien. The priority of the lien would be dependent upon the date that the recording took place. For example, a lien recorded on Jan 1, 2007 for $20,000 would be the first mortgage, and a lien recorded on Jan 2, 2007, for $1,500,000 would be a second mortgage, even though it was a higher amount. Recordings of the document also determined who had the “beneficial interest” in the Note. An interested party simple looked at the Assignments, and knew who held the Note and who was the legal party of beneficial interest. (For traditional lending prior to Securitization, the original Deed recording was usually the only recorded document in the Chain of Title. That is because banks kept the loans, and did not sell the loan, hence, only the original recording being present in the banks name. The advent of Securitization, especially through “Private Investors” and not Fannie Mae or Freddie Mac, involved an entirely new process in mortgage lending. With Securitization, the Notes and Deeds were sold once, twice, three times or more. Using the traditional model would involve recording new Assignments of the Deed and Note as each transfer of the Note or Deed of Trust occurred. Obviously, this required time and money for each recording. (The selling or transferring of the Note is not to be confused with the selling of Servicing Rights, which is simply the right to collect payments on the Note, and keep a small

portion of the payment for Servicing Fees. Usually, when a homeowner states that their loan was sold, they are referring to Servicing Rights.) The creation of MERS changed the process. Instead of the lender being the Beneficiary on the Deed of Trust, MERS was now named as either the “Beneficiary” or the “Nominee for the Beneficiary” on the Deed of Trust. The concept was that with MERS assuming this role, there would be no need for Assignments of the Deed of Trust, since MERS would be given the “power of sale” through the Deed of Trust. The naming of MERS as the Beneficiary meant that certain other procedures had to change. This was a result of the Note actually being made out to the lender, and not to MERS. Before explaining this change, it would be wise to explain the Securitization process.

Securitizing a Loan
Securitizing a loan is the process of selling a loan to Wall Street and private investors. It is a method with many issues to be considered, especially tax issues, which is beyond the purview of this article. The methodology of securitizing a loan generally followed these steps:

A Wall Street firm would approach other entities about issuing a “Series of Bonds” for sell to investors and would come to an agreement. In other words, the Wall Street firm “pre-sold” the bonds. The Wall Street firm would approach a lender and usually offer them a Warehouse Line of Credit. This credit would be used to fund the loans. The Warehouse Line would include the initial Pooling & Servicing Agreement Guidelines and the Mortgage Loan Purchase Agreement. These documents outlined the procedures for creation of the loans and the administering of the loans prior to, and after, the sale of the loans to Wall Street. The Lender, with the guidelines, essentially went out and found “buyers” for the loans, people who fit the general characteristics of the Purchase Agreement,. (Guidelines were very general and most people could qualify.” The Lender would execute the loan and fund it, collecting payments until there were enough loans funded to sell to the Wall Street firm who could then issue the bonds. Once the necessary loans were funded, the lender would then sell the loans to the “Sponsor”, usually the Wall Street firm. At this point, the loans are separated into “tranches” of loans, where they are then turned into bonds. Then, they went to the “Depositor”, usually either the Wall Street firm or back to the lender through as separate entity, and then they would be sold to the “Issuing Entity” which would be the created entity for the selling of the bonds. Finally, the bonds would be sold, with a Trustee appointed to ensure that the bondholders received their monthly payments.

As can be seen, each Securitized Loan has had the ownership of the loan transferred two to three times minimum, and without Assignments executed for each transfer.

(Note: This is a VERY simplified version of the process, but it gives the general idea. Depending upon the lender, it could change to some degree, especially if Fannie Mae bought the loans. The purpose of such a convoluted process was so that the entities selling the bonds could become a “bankruptcy remote” vehicle, protecting lenders and Wall Street from harm, and also creating a “Tax Favorable” investment entity known as an REIMC. An explanation of this process would be cumbersome at this time.)

New Procedures
As mentioned previously, Securitization and MERS required many changes in established practices. These practices were not and have not been codified, so they are major points of contention today. I will only cover a few important issues which are being fought out in the courts today. One of the first issues to be addressed was how MERS might foreclose on a property. This was “solved” through an “unusual” practice.

MERS has only 44 employees. They are all “overhead”, administrative or legal personnel. How could they handle the load of foreclosures, Assignments, etc to be expected of a company with their duties and obligations?When a lender, title company, foreclosure company or other firm signed up to become a member of MERS, one or more of their people were designated as “Corporate Officers” of MERS and given the title of either Assistant Secretary or Vice President. These personnel were not employed by MERS, nor received income from MERS. They werebeen named “Officers” solely for the purpose of signing foreclosure and other legal documents in the name of MERS. (Apparently, there are some agreements which “authorize” these people to act in an Agency manner for MERS.)

This “solved” the issue of not having enough personnel to conduct necessary actions. It would be the Servicers, Trustees and Title Companies conducting the day-to-day operations needed for MERS to function. As well, it was thought that this would provide MERS and their “Corporate Officers” with the “legal standing” to foreclose. However, this brought up another issue that now needed addressing:

When a Note is transferred, it must be endorsed and signed, in the manner of a person signing his paycheck over to another party. Customary procedure was to endorse it as “Pay to the Order of” and the name of the party taking the Note and then signed by the endorsing party. With a new party holding the Note, there would now need to be an Assignment of the Debt. This could not work if MERS was to be the foreclosing party.

Once a name is placed into the endorsement of the Note, then that person has the beneficial interest in the Note. Any attempt by MERS to foreclose in the MERS name would result in a challenge to the foreclosure since the Note was owned by “ABC” and MERS was the “Beneficiary”. MERS would not have the legal standing to foreclose, since only the “person of interest” would have such authority. So, it was decided that the Note would be endorsed “in blank”, which effectively made the Note a “Bearer Bond”, and anyone holding the Note would have the “legal standing” to enforce the Note under Uniform Commercial Code. This would also suggest that Assignments would not be necessary. MERS has recognized the Note Endorsement problem and on their website, stated that they could be the foreclosing party only if the Note was endorsed in blank. If it was endorsed to another party, then that party would be the foreclosing party. As a result, most Notes are endorsed in blank, which purportedly allows MERS to be the foreclosing party. However, CA Civil Code 2932.5 has a completely different say in the matter. It requires that the Assignment of the Debt be executed.

CA Civil Code 2932.5 – Assignment“Where a power to sell real property is given to a mortgagee, or other encumbrancer, in an instrument intended to secure the payment of money, the power is part of the security and vests in any person who by assignment becomes entitled to payment of the money secured by the instrument. The power of sale may be exercised by the assignee if the assignment is duly acknowledged and recorded.”

As is readily apparent, the above statute would suggest that Assignment is a requirement for enforcing foreclosure. The question now becomes as to whether a Note Endorsed in Blank and transferred to different entities as indicated previously does allow for foreclosure. If MERS is the foreclosing authority but has no entitlement to payment of the money, how could they foreclose? This is especially true if the true beneficiary is not known. Why do I raise the question of who the true beneficiary is? Again, from the MERS website……..

“On MERS loans, MERS will show as the beneficiary of record. Foreclosures should be commenced in the name of MERS. To effectuate this process, MERS has allowed each servicer to choose a select number of its own employees to act as officers for MERS. Through this process, appropriate documents may be executed at the servicer’s site on behalf of MERS by the same servicing employee that signs foreclosure documents for non-MERS loans.Until the time of sale, the foreclosure is handled in same manner as non-MERS foreclosures. At the time of sale, if the property reverts, the Trustee’s Deed Upon Sale will follow a different procedure. Since MERS acts as nominee for the true beneficiary, it is important that the Trustee’s Deed Upon Sale be made in the name of the true beneficiary and not MERS. Your title company or MERS officer can easily determine the

true beneficiary. Title companies have indicated that they will insure subsequent title when these procedures are followed.” There, you have it. Direct from the MERS website. They admit that they name people to sign documents in the name of MERS. Often, these are Title Company employees or others that have no knowledge of the actual loan and whether it is in default or not. There, you have it. Direct from the MERS website. They admit that they name people to sign documents in the name of MERS. Often, these are Title Company employees or others that have no knowledge of the actual loan and whether it is in default or not. Even worse, MERS admits that they are not the true beneficiary of the loan. In fact, it is likely that MERS has no knowledge of the true beneficiary of the loan for whom they are representing in an “Agency” relationship. They admit to this when they say “Your title company or MERS officer can easily determine the true beneficiary. To further reinforce that MERS is not the true beneficiary of the loan, one need only look at the following Nevada Bankruptcy case, Hawkins, Case No. BK-S-07-13593-LBR (Bankr.Nev. 3/31/2009) (Bankr.Nev., 2009) – “A “beneficiary” is defined as “one designated to benefit from an appointment, disposition, or assignment . . . or to receive something as a result of a legal arrangement or instrument.” BLACK’S LAW DICTIONARY 165 (8th ed. 2004). But it is obvious from the MERS’ “Terms and Conditions” that MERS is not a beneficiary as it has no rights whatsoever to any payments, to any servicing rights, or to any of the properties secured by the loans. To reverse an old adage, if it doesn’t walk like a duck, talk like a duck, and quack like a duck, then it’s not a duck.” If one accepts the above ruling, which MERS does not agree with, MERS would not have the ability to foreclose on a property for lack of being a true Beneficiary. This leads us back to the MERS as “Nominee for the Beneficiary” and foreclosing as Agent for the Beneficiary. There may be pitfalls with this argument.

When the initial Deed of Trust is made out in the name of MERS as Nominee for the Beneficiary and the Note is made to AB Lender, there should be no issues with MERS acting as an Agent for AB Lender. Hawkins even recognizes this as fact. The issue does arise when the Note transfers possession. Though the Deed of Trust states “beneficiary and/or successors”, the question can arise as to who the successor is, and whether Agency is any longer in effect. MERS makes the argument that the successor Trustee is a MERS member and therefore Agency is still effective, and there does appear to be merit to the argument on the face of it.The original Note Holder, AB Lender, no longer holds the note, nor is entitled to payment. Therefore, that Agency relationship is terminated. However, the Note is endorsed in blank, and no Assignment has been made to any other entity, so who is the true beneficiary? And without the Assignment of the Note, is the Agency relationship intact?

Uniform Commercial Code may address this issue, however, it can be argued in the negative: Uniform Commercial Code§ 3-301. PERSON ENTITLED TO ENFORCE INSTRUMENT. “Person entitled to enforce” an instrument means (i) the holder of the instrument, (ii) a non-holder in possession of the instrument who has the rights of a holder, or (iii) a person not in possession of the instrument who is entitled to enforce the instrument pursuant to Section 3-309 or 3-418(d). A person may be a person entitled to enforce the instrument even though the person is not the owner of the instrument or is in wrongful possession of the instrument. Are you confused yet? I am. Most attorneys are. And most courts are…….

Separation of the Note and the Deed
There is one more issue that I will now address. That is the separation of the Note and the Deed of Trust. Again, case law is confused on this. In the case of MERS, the Note and the Deed of Trust are held by separate entities. This can pose a unique problem dependent upon the court. There are many court rulings based upon the following: “The Deed of Trust is a mere incident of the debt it secures and an assignment of the debt carries with it the security instrument. Therefore, a Deed Of Trust is inseparable from the debt and always abides with the debt. It has no market or ascertainable value apart from the obligation it secures. A Deed of Trust has no assignable quality independent of the debt, it may not be assigned or transferred apart from the debt, and an attempt to assign the Deed Of Trust without a transfer of the debt is without effect. “ This very “simple” statement poses major issues. To easily understand, if the Deed of Trust and the Note are not together with the same entity, then there can be no enforcement of the Note. The Deed of Trust enforces the Note. It provides the capability for the lender to foreclose on a property. If the Deed is separate from the Note, then enforcement, i.e. foreclosure cannot occur. The following ruling summarizes this nicely. In Saxon vs Hillery, CA, Dec 2008, Contra Costa County Superior Court, an action by Saxon to foreclose on a property by lawsuit was dismissed due to lack of legal standing. This was because the Note and the Deed of Trust were “owned” by separate entities. The Court ruled that when the Note and Deed of Trust were separated, the enforceability of the Note was negated until rejoined. ( Note: LFI did the audit for this loan.)

All Saxon could do on this loan would be to rescind the foreclosure, reunite the Deed and the Note by Assignment and then foreclose again. Other examples of this is that in the past month, LFI has done audits whereby it was determined that Notary Fraud was present with regard to the signing of the Deed of Trust. This immediately made the Deed of Trust void, and as a result, the Note was then “Unsecured Debt”, and the property was unable to be foreclosed upon. There is even question as to if the Note is void as well. As I have attempted to show, the whole concept of MERS is fraught with controversy and questions. Certainly, at the very least, MERS actions pose legal issues that are still being addressed each and every day. As to where these actions will ultimate lead, it is anybody’s guess. With some courts, the court sides with the lender, and others side with the homeowner. However, there does appear to be a trend developing that suggests, at least in Bankruptcy Courts, MERS is losing support. I would like to again make note of the fact that this is simply a basic primer on MERS and the issues surrounding it. To fully cover MERS, I could easily write 100 pages, quoting statutes, case law and legal theories regarding how to defend against MERS.. However, I will save that for the attorneys, and someday, when I have time to write a book on the battles occurring daily in the courts.

As I wrote this article, a case pending on appeal in Kansas was finally decided. This case, Landmark vs Kesler, Milliennia, MERS, Sovereign Bank and others was finally decided. It offered some interesting conclusions, and reinforces what I had written about in the above article. I must stress that this case is a guide only. It was in Kansas, and draws from case law in many different states. What is important is that with any Court, case law within the jurisdiction of the Court must be considered first in arguments. If such case law for arguments does not exist, then case law from other jurisdictions can be used to support the arguments. What this case does do is provide guidelines for arguing in other venues. I do find the case very interesting in that it does highlight the general issues that I addressed above. It supports Haskins very nicely. It should be noted that various articles have already been written, some of which promote the idea that it will mean free homes for millions of people. This is not likely for various reasons. However, it does offer interesting possibilities regarding certain lawsuits that I am currently assisting with. Of course, LFI has anticipated this occurring and is currently assisting attorneys in refining the argument.

This case is about a foreclosure that had occurred. The lender is trying to overturn a default judgement in favor of another lender. MERS has sided with that lender. As such, the differences in this case could weigh heavy in future rulings. I will just cite relevant portions without going into great detail, which would take a day to write. My comments follow each quote from the ruling. “While this is a matter of first impression in Kansas, other jurisdictions have issued opinions on similar and related issues, and, while we do not consider those opinions binding in the current litigation, we find them to be useful guideposts in our analysis of the issues before us.” This supports my contention that this is only useful in other jurisdictions to argue, but jurisdictional case law takes precedence in each area. Therefore, arguments must be made that can overturn such case law. “Black’s Law Dictionary defines a nominee as “[a] person designated to act in place of another, usu. in a very limited way” and as “[a] party who holds bare legal title for the benefit of others or who receives and distributes funds for the benefit of others.” Black’s Law Dictionary 1076 (8th ed. 2004). This definition suggests that a nominee possesses few or no legally enforceable rights beyond those of a principal whom the nominee serves……..The legal status of a nominee, then, depends on the context of the relationship of the nominee to its principal. Various courts have interpreted the relationship of MERS and the lender as an agency relationship.” This is the essence of the Agency Relationship that I presented above. “LaSalle Bank Nat. Ass’n v. Lamy, 2006 WL 2251721, at *2 (N.Y. Sup. 2006) (unpublished opinion) (”A nominee of the owner of a note and mortgage may not effectively assign the note and mortgage to another for want of an ownership interest in said note and mortgage by the nominee.”)” This case, if used and upheld in California, could portend great consequences for all homeowners. The law generally understands that a mortgagee is not distinct from a lender: a mortgagee is “[o]ne to whom property is mortgaged: the mortgage creditor, or lender.” Black’s Law Dictionary 1034 (8th ed. 2004). By statute, assignment of the mortgage carries with it the assignment of the debt. K.S.A. 58-2323. Although MERS asserts that, under some situations, the mortgage document purports to give it the same rights as the lender, the document consistently refers only to rights of the lender, including rights to receive notice of litigation, to collect payments, and to enforce the debt obligation. The document consistently limits MERS to acting “solely” as the nominee of the lender. Indeed, in the event that a mortgage loan somehow separates interests of the note and the deed of trust, with the deed of trust lying with some independent entity, the mortgage may become unenforceable.

“The practical effect of splitting the deed of trust from the promissory note is to make it impossible for the holder of the note to foreclose, unless the holder of the deed of trust is the agent of the holder of the note. [Citation omitted.] Without the agency relationship, the person holding only the note lacks the power to foreclose in the event of default. The person holding only the deed of trust will never experience default because only the holder of the note is entitled to payment of the underlying obligation. [Citation omitted.] The mortgage loan becomes ineffectual when the note holder did not also hold the deed of trust.” Bellistri v. Ocwen Loan Servicing, LLC, 284 S.W.3d 619, 623 (Mo. App. 2009). “MERS never held the promissory note, thus its assignment of the deed of trust to Ocwen separate from the note had no force.” 284 S.W.3d at 624; see also In re Wilhelm, 407 B.R. 392 (Bankr. D. Idaho 2009) (standard mortgage note language does not expressly or implicitly authorize MERS to transfer the note); In re Vargas, 396 B.R. 511, 517 (Bankr. C.D. Cal. 2008) (”[I]f FHM has transferred the note, MERS is no longer an authorized agent of the holder unless it has a separate agency contract with the new undisclosed principal. MERS presents no evidence as to who owns the note, or of any authorization to act on behalf of the present owner.”); Saxon Mortgage Services, Inc. v. Hillery, 2008 WL 5170180 (N.D. Cal. 2008) (unpublished opinion) (”[F]or there to be a valid assignment, there must be more than just assignment of the deed alone; the note must also be assigned. . . . MERS purportedly assigned both the deed of trust and the promissory note. . . . However, there is no evidence of record that establishes that MERS either held the promissory note or was given the authority . . . to assign the note.”). This identifies the real issue, as I mentioned previously. The Note and the Deed were separated, so without Assignments uniting them, there can be no foreclosure. What stake in the outcome of an independent action for foreclosure could MERS have? It did not lend the money to Kesler or to anyone else involved in this case. Neither Kesler nor anyone else involved in the case was required by statute or contract to pay money to MERS on the mortgage. See Sheridan, ___ B.R. at ___ (”MERS is not an economic ‘beneficiary’ under the Deed of Trust. It is owed and will collect no money from Debtors under the Note, nor will it realize the value of the Property through foreclosure of the Deed of Trust in the event the Note is not paid.”). If MERS is only the mortgagee, without ownership of the mortgage instrument, it does not have an enforceable right. See Vargas, 396 B.R. 517 (”[w]hile the note is ‘essential,’ the mortgage is only ‘an incident’ to the note” [quoting Carpenter v. Longan, 16 Wall. 271, 83 U.S. 271, 275, 21 L. Ed 313 (1872)]). This reinforces the Hawkins argument that without a “Beneficial Interest”, there is no ability to enforce the note. This ruling in Kansas comes down to several basic issues. These are that:

MERS had no Beneficial Interest in the Note, therefore, they could not be a Party of Interest and had no authority in the case.

• • •

MERS and the Agency Relationship did not exist with the Assignment of the Note without a new Agency Agreement. The Note and the Deed of Trust were separated, therefore, the Note could not be enforced by the Deed of Trust. MERS did not have a power to assign the Note.

This ruling, along with Hawkins, can offer the attorney a practical roadmap on how to attack MERS. It should not be taken for granted that this will apply in all states immediately, nor that this will be easy. Jurisdictional Case Law will certainly have to be fought out and overcome. Additionally, I do expect further appeals of this case, especially with other parties joining in to side with MERS because of the practical implications of this ruling.

About the Author
Patrick Pulatie is the CEO for Loan Fraud Investigations (LFI). LFI is a Forensic/Predatory Lending Audit company in Antioch CA, and has been doing homeowner audits since Nov 07. LFI works daily with Attorneys throughout California, assisting homeowners in the fight to save their homes. He and Attorneys are constantly developing new strategies to counter foreclosure efforts by lenders. → No CommentsTags:Case No. BK-S-07-13593-LBR (Bankr.Nev. 3/31/2009)·Hawkins·LaSalle Bank Nat. Ass’n v. Lamy·loan fraud investigations·matt weidner·MERS·patrick pulatie·Saxon vs Hillery

Assignments of Mortgage and the Equitable Transfer/Liar’s Transfer- JP Morgan v. New Millenial
March 1st, 2010 · Foreclosure 701.02 Assignment not effectual against creditors unless recorded and indicated in title of document; applicability.– (1) An assignment of a mortgage upon real property or of any interest therein, is not good or effectual in law or equity, against creditors or subsequent purchasers, for a valuable consideration, and without notice, unless the assignment is contained in a document that, in its title, indicates an assignment of mortgage and is recorded according to law. (2) This section also applies to assignments of mortgages resulting from transfers of all or any part or parts of the debt, note or notes secured by mortgage, and none of same is effectual in law or in equity

against creditors or subsequent purchasers for a valuable consideration without notice, unless a duly executed assignment be recorded according to law. (3) Any assignment of a mortgage, duly executed and recorded according to law, purporting to assign the principal of the mortgage debt or the unpaid balance of such principal, shall, as against subsequent purchasers and creditors for value and without notice, be held and deemed to assign any and all accrued and unpaid interest secured by such mortgage, unless such interest is specifically and affirmatively reserved in such an assignment by the assignor, and a reservation of such interest or any part thereof may not be implied. The foregoing was quoted directly from Florida Statutes, found here. Pinellas Judge Douglas Baird had a case in front of him earlier last year called JP MORGAN CHASE v New Millenneal which is a must read case for anyone interested in foreclosure. In JP a title company did a title search and discovered two mortgages against the property that were recorded in the name of AMsouth Bank. The title company contacted Amsouth to find out how much was required to pay the mortgages off and received back written confirmation that said, “pd Off”. Great, mortgages cleared…ready to close….only not so fast. Turns out the mortgages had been assigned to a secondary purchaser, JP Morgan… Amsouth was paid off, but the JP Morgan was still owed the mortgages. If JP Morgan had recorded assignments of mortgage the title company could have figured that out and gotten the payoff, but JP violated the statute and failed to record the assignment…they violated Florida Statutes 701.02 so their penalty is they lose right? Judge Baird correctly though so, but he was reversed by the Second DCA. In a tortured decision, the Appellate Court reasoned that the subsequent purchasers…even though they relied upon the documents that were recorded in public records, could not rely on Florida’s Notice Recording Statute. JP Morgan was a watershed case, but unfortunately the Second DCA opinion sent it in the wrong direction. Given the tortured reasoning and the lack of consideration for the practical realities and functioning of closing/title operations, the decision in my mind just represents the recognition on the court’s part that if they strictly enforced the law, the Baird’s correct initial decision would have been a catastrophe for real estate/lenders and title companies and the whole MERS system. The catastrophe is still coming and Judge Baird’s decision will be cited when the larger catastrophe finally comes, but for the short term, the MERS fiction and secrets behind the curtain continue to function. It is important to know and cite this opinion, because it shows our judge’s exactly what is going wrong with this MERS shadow system…and will help them understand problems with decisions they are issuing now.

One questions on “equitable transfers” of mortgages… Why aren’t the county tax collectors figuring out a way to collect tax on “equitable transfers” of mortgages? I mean if courts now find that equitable transfers have the same effect as honest transfers, shouldn’t the recording tax be collected on the liar’s transfer? → No CommentsTags:701.02·assignemnt of mortage·douglas baird·Florida Statute 701.01·Jp morgan v. new millennieal·matt weidner

MERS is Cracking
March 1st, 2010 · Foreclosure From the Mortgage Electronic Registration Systems, Inc. website comes the following announcement that I first read about on Foreclosure Hamlet: POLICY BULLETIN – Number 2010-1 To: All MERS Members February 17, 2010 Starting April 19, 2010, all new Mortgage Electronic Registration Systems, Inc. (MERS) Certifying Officers will be required to complete a certification process before being authorized to execute documents as a MERS Certifying Officer. The MERS Project Manager for each Member will be responsible for overseeing the completion of this process for each proposed Certifying Officer, and no Corporate Resolution will be approved until this process has been completed by every proposed Certifying Officer. Members who already have a MERS Corporate Resolution in place will be contacted in phases to begin the certification process for the Certifying Officers listed on their Corporate Resolution. This transition will begin in April, and continue until all Members have completed their certification. If you request an update to your Corporate Resolution or Certifying Officers list during this time, you will need to complete the certification process to effect the update. During the transition, existing Corporate Resolutions will remain in effect with no lapse in signing authority. We will provide more details about this transition closer to the implementation date. If you have any questions about the new process, please contact I suspect that a big portion of the compliance process will be making sure they don’t tell the truth in a deposition like Cheryl Sammons did (No I don’t read documents before I sign them.) Clearly MERS is feeling concern about the way their business has been conducted in the past. This also suggests there are deficiencies in the MERS process all

the way until April 19, 2010 that must be examined and shared with judges. Every MERS assignment is a questionable one! → No CommentsTags:assignment fraud·assingment fraud·foreclosure hamlet·MERS·mers policy bulletin number 2010-1

The Anti-MERS Mortgage Manifesto
February 28th, 2010 · Foreclosure Greg Clark is a brilliant Clearwater, Florida attorney who has been a practicing title attorney for 30 years. For hundreds of years, a title attorney’s job was to examine all of the records that related to a property and then issue an attorney’s opinion of title or title insurance policy confirming that if his client purchased the property or lent money against the property, they were doing so free of any claims by another other person or party who might claim an interest in the property. I say that the job “used to be” because after the development of the Mortgage Electronic Registration System or MERS, no attorney can tell you what other party might claim an interest in the property because that information is locked away deep inside a private company…MERS. A mortgage is recorded in the county public records, but who owns it and who may have any rights to that mortgage is a closely held secret. Kessler, Azize, New Millennial, BAC Funding The Cases That Crack MERS A good example of what goes wrong in the secret system is a case called JP Morgan v. New Millennial, a Pinellas County case that was decided correctly by Judge Douglas Baird, who was unfortunately reversed by the Second District Court of Appeal. I’m going to write a full post on this case later, but it is an important case to know and understand so I post the entire case here. Support for Greg’s important argument is found in a Kansas Supreme Court case, Kessler v. Landmark, which is found here. A fascinating thing about the Kessler opinion out of way far away Kansas is that it cites another Pinellas County Case, Azize v. MERS, found here. Now here’s what’s fascinating about the Azize opinion. MERS “won” that case…the Second DCA found that they could proceed with the foreclosure cases they had filed, but even though they “won” the case, neither MERS nor lenders cite that case or want courts to pay attention to that case. The reason why is found in footnote number 2: Although the complaint does not allege how or why MERS came to be the owner and holder of the note, the trial court’s dismissal wasnot based on this deficit.Since the trial court did not base its ruling on this issue,we offer no opinion as to whether the complaint fails to properly plead a cause of action without this information being alleged. By now everyone’s read the BAC Funding case, so I won’t waste time with the opinion, what I will share is the appellate brief that most people haven’t read. The brief answers many of the questions that are not adequately explained in the Order, and the brief is the

important, “secret” information…the “secret” brief can be found here. This brief should be provided to every judge who hears foreclosure cases to help them apply the BAC opinion to cases in their courtroom that match the facts described in the BAC brief. What do we know about secrets when they relate to public policy? What place do secrets have in our of public court systems? Secrets are bad news in almost every context, but they’re especially bad when it comes to matters of public policy and our court systems. So anyway, Greg Clark makes a brilliant argument that the MERS system is a total violation of real property laws that have existed for literally hundreds of years and that the consequences of this system that violates the law are going to be catastrophic. Greg posted a comment to my recent questions about the MERS system….I struggled with his argument at first, but as he explains below, the problem is not all that complex and the fundamental violations of law are pretty clear: Let me give you the short answer to your question of “why the MERS assignments”, if Johns Gillian and its progeny applies: IT DOESN’T and the higher ups, who didn’t want to spend $10.50 (to our clerks of court) to do just one extra assignment, know it. You see, the original introduction of MERS was post closing, that is, the note and mortgage were, at inception, put into the name of the original lender so you had compliance with the rule of common law, of unity of title of the note and mortgage into one holder. It was after that that the unenforceable attempt at splitting the note from the mortgage, by assignment, occurred, which assignment Florida law holds as a nullity (see Vance, Sobel, etc.). So the assignment being invalid simply means that you go back “revert’ to the original transaction which was clean and unified in one holder, thus John/Gillian would have applied. But now it doesn’t because of that extra $10.50 the lenders and mers wanted to pocket. Almost immediately after they started the post closing assignments lenders saw that $10.50 expense and decided to instead split the note and mortgage at the closing, AT INCEPTION, and, in essence, keep the money for themselves (ah, multiplied by 50 or 60 million loans that works out to 5 or 6 billion dollars if my math is right). Problem is that Florida law, which follows the common law of almost every state in the union states that bifurcation of the mortgage from the note renders the mortgage unenforceable, a nullity, was ignored. This basic principal against note/mortgage splitting was reiterated in the U.S. Supreme court in the Carpenter case a long time ago, even before Johns/Gillian. To date their exists no statutory or case law abrogating this fundamental concept of property law, which we inherited from English common law, unmodified. MERS and the foreclosing lender proxies simply hoped (and still hope) they can moonwalk away from the scene of this title failure with these invalid assignments hoping

no one notices the fact that an assignment can rise no higher in dignity that the failure of title upon which it is based. Whats more, even poetic, is that the “MERS mortgage” (even if the court wants to ignore this fundamental failure of title at inception) contains no right, in the grant of the mortgage, allowing MERS to assign its duties as NOMINEE or to transfer or otherwise assign the mortgage. They have painted themselves into a legal corner. I’ve been practicing dirt law for some 30 years, writing title, crafting grant language, and chaining ownership, etc. and I understand that most if not all judges were former litigators who simply have no knowledge beyond their law school years in this subcategory of transactional practice and procedure, other than rubber stamping SJs presuming the plaintiffs bar will not lead them into error. (see and read the recent BAC Funding case out of our 2d DCA) Its the same reason most people sit down and sign closing papers without thinking or reading them: because we have (or had) a solid and fair system or real property law in place for nearly a thousand years behind it each and every one of those deals. It is now in great doubt whether it is fair or solid or even legal, with the disabling injection of the MERS mortgage and invisible lender lien holder now clouding our record titles. Anyhow, what mystifies me most is why they took such a big chance. You would have thought that they would have at least tried to adopt nationwide recording/title law changes to allow the MERS mortgage splitting concept. I mean, they undertook the UCC article 9 changes which passed the 50 states to allow the securitization of debt, but they forgot to include the MERS configuration into the changes. They just assumed the real estate mortgage would simply tag along like a caboose into article nine. They rolled the bones that they could circumvent each states legislature and do a private deal with MERS. They likely feared the states would object to the degradation of their record title statutes and the evisceration of their public recording systems, not to mention the loss of recording fee revenue. MERS, by the way is a privately owned company funded and financed by the big box lenders and, guess who else? The major title insurance companies and ALTA (American Land Title Association). This conflict of interest relationship does not allow for the independent accounting or transparency the public should have when it comes to the biggest investment of our lives. A guy like me who wants to investigate title to make sure my client gets a clean and clear deed or new mortgage can’t determine by relying on the public title records who owns the old mortgage loan that needs to be paid off. We simply run into the MERS strawman and have to hope they give us true and accurate info – if they give us any info at all – as to who to payoff to free title.

MERS is not a government agency looking out for the interests of the public. MERS is a profit driven closely held corporation. They openly seek to privatize all of our public records as they relate to real estate mortgages. Absolute power through control of information. Absolute power, vested in the hands of private corporate interests. Hardly egalitarian in a free democracy and open economy. And this is why note/mortgage splitting, something that is already in derogation of our common law, should not be allowed. Its just bad business. JEDTI G. http://www.gregorydclarklaw,com → 4 CommentsTags:azize v. MERS·bac funding v. us bank·douglas baird·foreclosure fraud·greg clark·jp morgan v. new millenial·kessler v. landmark·matt weidner·MERS·Mortgage Electronic Registration System·pinellas foreclosure

Judge’s Order Cancelling Foreclosure Sale- What if This Wasn’t Caught? What if The Sale Went Through?
February 27th, 2010 · Foreclosure I attach here a copy of an Order signed by Judge Charles Roberts in Sarasota on February 26, 2010. Please take time to read it carefully. In it, the judge makes specific findings of fact that the Plaintiff: 1. Failed to show it was entitled to foreclose; 2. Failed to show it was the holder of the note and mortgage; 3. Failed to establish any admissible evidence to show that it validly held the note and mortgage. Caught one Stinking Fish….How Many Got Away? The fact that these major issues were caught is good. The problem is, how many tens of thousands? tens of hundreds of thousands? millions? of judgments of foreclosure have

been signed across the country when the Plaintiff:1. Failed to show it was entitled to foreclose 2. Failed to show it was the holder of the note and mortgage 3. Failed to establish any admissible evidence to show that it validly held the note and mortgage. I believe there are tens of thousands, maybe hundreds of thousands of judgments entered across the state (millions across the country?) where this is the case. I believe depositions of key employees at document preparation mills and foreclosure mills is going to reveal assembly line document fabrication which purports to give Plaintiffs a basis for forecloure, when no proper evidentiary basis exists. At some point in time in the foreclosure files that the mills have rushed through are going to be carefully examined..if not by defense attorneys what about junior lienholders, certificate holders, bondholders, investment firms….when that happens now we’re talking major problems. What happens when the assignments of mortgage were improper/fraudulent on their face? What happens when the note and mortgage and allegations contained within the pleadings are all inconsistent, yet Final Judgment was entered based on “facts” that are of record that do not support that judgment? And now my final question of the post….WHY ARE PLAINTIFF’S FIRMS/LENDERS BOTHERING TO GET ASSIGNMENTS OF MORTGAGES AT ALL? If Johns v. Gillian and the law as it exists is that lenders do not need an assignment of mortgage, why bother with word processing hundreds of thousands of assignments of mortgages in law firms and document mills all across the country? In many cases, lenders are coming to the table with original notes. Ignore for the moment how they got them and what entity purports to hold them. Ignore for the moment that the endorsements/allonges are sloppy/inconsistent/questionable on their face. Even if a proper lender couldn’t come up with a note, they could still re-establish the note through a copy and there would be no need whatsoever (if the whole “mortgage is but an incident to the debt” argument remains valid) to have an assignment of mortgage. Why are document mills and foreclosure mills working weekends and around the clock to spit out assignments that purport to transfer mortgages out of MERS and other lenders/entities and into other entities that we no nothing about? How are we allowing tens of hundreds of millions of dollars to be transferred into things like “The IXIS 2006 Certificateholder, Asset Backed Trust”? Do judges/courts have any idea who these entities are? (I’ll answer that one, the answer is no.) Why are courts across the country transferring bajillions of dollars into alphabet soup entities that no one has any idea who controls or where they are located or what rules apply?

Why Are Courts in Florida Continuing to Rely on Legal Reasoning That Existed in 1938? Remember that the Johns v. Gillian “mortgage is but an incident to the debt” reasoning applied in tiny little town where parol documentation and other evidence existed that supported the foreclosing lender’s claim to ownership of both the note and the mortgage. Remember Johns v. Gillian is a 1938 case! The judge probably knew everyone in his courtroom (he probably knew the lawyers since they were snot nosed kids running around town kicking cans. He probably walked past or rode a horse past the property in question each day. And remember the Johns reasoning applied decades before MERS was even conceived of….Johns simply cannot stand true in the MERS environment… here is Greg Clark’s splitting/Kessler v. Landmark reasoning….Johns only applies when the mortgage and note were not separated right from the very beginning.…How can the Johns reasoning apply in the MERS environment? Consider all the cases, including WM Specialty v. Saloman and Chemical Residential v. Rector….assignments were of record in those cases and other evidence existed to support claims of ownership. There is almost no additional evidence of ownership or interest in the cases that are being shoved through courts other than a few questionable documents…..but again the burning question…. Why The Assignments of Mortgage? → 2 CommentsTags:april charney·bac funding v. us bank·bank of america·florida foreclosure·foreclosure fraud·greg clark·hamp·johns v. gillian·kessler v. landmark·matt weidner·MERS·Mortgage Electronic Registration System·The Florida Consumer Protection and Homeowner Credit Rehabilitation Act

Dismissals of Cases Based on Fl.R.Civ.P. 1.070(j)
February 26th, 2010 · Foreclosure Across the State of Florida, foreclosure cases are filed and then for a variety of reasons, those cases are not actively pursued by the Plaintiff or the attorneys that filed the case. There are any number of reasons why a Plaintiff may choose not to pursue a case, or not be able to pursue a case, like when a pesky borrower or defense attorney or judge asks the Plaintiff to produce some shred of evidence that they have the right to file the lawsuit in the first place or the parties may have reached a settlement and agreed not to proceed with the case. Whatever the case may be, our courts need a mechanism to ensure these “stale” cases don’t go just languishing around with nobody doing anything. That mechanism is a nifty little rule called Florida Rule of Civil Procedure, Rule 1.070. Now anytime you want to check out a Rule of Civil Procedure for Florida Courts, don’t mess around with a book,check out the Florida Rules of Civil Procedure Online. It’s a nifty site because it has

not only the Rules, but cases and Orders both from appellate and circuit courts. So back our issue with Rule 1.070…copied from our nifty new site is the text of the rule:

Florida Rules of Civil Procedure 1.070 Process
(j) Summons; Time Limit. If service of the initial process and initial pleading is not made upon a defendant within 120 days after filing of the initial pleading directed to that defendant the court, on its own initiative after notice or on motion, shall 1)direct that service be effected within a specified time or shall 2)dismiss the action without prejudice or 3)drop that defendant as a party; (emphasis added) provided that if the plaintiff shows good cause or excusable neglect for the failure, the court shall extend the time for service for an appropriate period. When a motion for leave to amend with the attached proposed amended complaint is filed, the 120-day period for service of amended complaints on the new party or parties shall begin upon the entry of an order granting leave to amend. A dismissal under this subdivision shall not be considered a voluntary dismissal or operate as an adjudication on the merits under rule 1.420(a)(1). So if a Plaintiff chooses not to pursue a case,the court sends out a letter to the Plaintiff and says, “Hey Plaintiff, if you don’t do something here, we’re going to dismiss your case.” All the Plaintiff needs to do is file something, any old something, to prevent the court from dismissing the case. If the Plaintiff doesn’t file something, the Rule provides the court with three options….as indicated above. Attached here is a Motion where I describe clearly the three options that are available to the court and the case law that supports each option. Give the motion a read, and the cases to understand how the rule works in why. Dropping Defendants, a Bad Decision for Courts To Make Now in a foreclosure case, the third option, dropping the defendant as a party, is a dangerous business because the court risks making a determination that no tenants exist when tenants might in fact be living in the property. If the tenants are dropped and the home is sold in foreclosure, their only notice the tenant might get would be the Writ of Possession posted on the door or the lender kicking down the door and throwing their property out on the street. This might not be such a risk were it not for the widespread phenomena of “Sewer Service” or other improper conduct on the part of lenders and their attorneys, but given the widespread knowledge of this practice, the proper option for the court to select, (and the option that is clearly indicated on those Orders when the rule is invoked) is to Order that the case is dismissed. No harm, no foul, no risk of irreparable harm to innocent tenants, no violation of their fundamental rights as is the case when the lender and their jack booted thugs

kicks down the tenants door and says, “Sorry you paid your rent to your landlord, but he didn’t pay his mortgage and now you’re out on the street.”

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About Chapters 658 and 660 Florida Statutes and Foreclosures in Florida Foreclosure inPinellas- Short Sale Steals and Interesting Deals Mortgage Modification Madness- The Futility of Trying Mortgage Modification- HAMP is the Answer! March 2010 (7) February 2010 (38) January 2010 (45) December 2009 (39) November 2009 (23) October 2009 (16) September 2009 (8) August 2009 (15) July 2009 (13) Warrant Issued For Arrest of Matthew Weidner In a Foreclosure Case Another Order Dismissing Foreclosure- Judge Jirotka 6th Circuit Pinellas County A Crystal Clear Explaination of Foreclosure Fraud- Schenider v. Deutsche Bank Class Action Florida Second DCA Reverses Summary Judgment in Foreclosure Fantastic Explanation of MERS- More Judicial Cracks Appear! Assignments of Mortgage and the Equitable Transfer/Liar’s Transfer- JP Morgan v. New Millenial

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