Professional Documents
Culture Documents
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4 relation to that?
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5 MR. HULTMAN: We're the beneficiary, but we're an
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7 both the payee on the note and the beneficiary in deed of
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9 we're holding title to the mortgage lien on their behalf.
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10 COMMITTEE MEMBER: Through this process called
11 nominee? su
12 MR. HULTMAN: Well, nominee is just another word for
13 agent.
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21 the role of the land records to tell anybody who the owner of
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1 MR. HULTMAN: Oh, okay. Fair enough.
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2 Just in response to something else that I heard you
3 ask the people from the Banker's Association. One of the other
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4 reasons why I think some of the states have not gone down this
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5 path about having the certificate of title for the indebtedness
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7 for the borrowers. Under RESPA, any borrower is entitled to
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9 under federal law in RESPA to give -- disclose the person who
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10 holds their note.
13 the name, but the statute, but it amended the Truth and Lending
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14 Act and added a section, 404, that requires now that every time
19 record in the land record, and one of the reasons that MERS
22 they would get rejected, and there would be breaks in the chain
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24 MERS so that from the beginning to the end, the loan, period,
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1 were recorded.
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2 COMMITTEE MEMBER: Let me ask this question. So as I
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4 because you from the beginning are the beneficiary --
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5 MR. HULTMAN: That's correct.
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7 our courthouses, there is never an assignment that's ever made.
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9 actual underlying promissory note.
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10 MR. HULTMAN: And that's where I think some of the
12 use the word assignment and mortgage and mortgage loan and note
15 there's a note.
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1 language in this bill that talks about assignments really
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2 doesn't affect you anyway because --
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4 than it solves any problems. I mean, a lot of what we see --
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5 and frankly, I talk to borrowers everyday. Borrowers call me
6 up. I mean, we heard the story from one of the lawyers here
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7 about how these things went in wrong places and did things.
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9 You know, if somebody called me up and asked me,
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10 which they didn't, we would have helped them sort out that
14 into the toll-free number that they can call, we'll tell them
16 percent of our members who haven't opted out, we'll give them
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17 the name of the noteholder, and sometimes I'll even give them
23 -- the owner -- we always show who the servicer was. That was
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24 our purpose. Now, since all of this activity has gone on,
25 we've been able to convince our members that, for most of them
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1 at least, that we'll be willing to disclose the -- who holds
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2 the note on their -- who (inaudible.)
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4 COMMITTEE MEMBER: I have a question. This section
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5 404 you were just talking about --
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7 COMMITTEE MEMBER: Yeah, section 404, it requires
8 what now?
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9 MR. HULTMAN: When the note is transferred or sold,
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10 the federal legislation requires a notice be delivered to the
15 loan, they're --
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18 this notice to the borrower, and on it, it says who the owner
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19 of the note is. It also tells the borrower who they have to
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1 know, they all use professional services because they're not in
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2 that business. They're in the business of owning notes and
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4 they'll tell you who to contact and they'll give specific
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5 contact information in that notice to let them know who they
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7 COMMITTEE MEMBER: This is just a follow-up. So
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9 bill, it wouldn't affect you anyway?
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10 MR. HULTMAN: Well, I think it would cause confusion
16 (inaudible).
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1 lot of people that know --
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2 MR. HULTMAN: I would say that there's a lot of --
3 COMMITTEE MEMBER: I --
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4 MR. HULTMAN: -- misunderstanding about MERS in the
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5 press and in the Internet stories about MERS. You go to our
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7 website, but we're a very transparent company. Everything
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9 disclose who we're acting for.
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10 The fact that we're acting as this nominee or agent
17 And you've heard about cases where they say MERS got
18 kicked out of court. Well, that may be true, but it's not
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20 state law. It's because there was a defect in the process, and
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21 the party who is bringing the prosecution had not done all of
22 the paperwork that they needed to be done, and those cases are
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1 COMMITTEE MEMBER: Mr. Chairman --
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2 COMMITTEE MEMBER: Any other questions?
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4 question about how I find my mortgage on the website, but I
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5 went on their website and I (inaudible) found my mortgage in
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7 MR. HULTMAN: Now, I would say this, MERS only has 60
8 percent of the mortgages. There are some people who chose not
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9 to use MERS for -- because they don't sell the loan. They buy
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10 the loan and they hold the service and they hold the mortgage
11 note or they secure -- so, you know, not everybody will find
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12 their mortgage on the system because we don't have a hundred
15 --
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1 clerk will result in more problems, not less problems. It adds
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2 costs. People will forget to do it, because people are human,
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4 it, what impact does it have on the process other than just
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5 trying to foreclose.
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7 looked at is it's only requiring the assignments and these
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9 foreclosure. You know, I get a lot of people who call me up
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10 and say, I can't find who has -- I want my lien released, and
11 we'll sign the lien release if we're satisfied that the note
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12 has been paid off. We can go to the title company and they'll
25 not?
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1 MR. HULTMAN: I have listened to the whole testimony,
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2 yes.
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4 where folks are saying they couldn't find out who owned the
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5 note or anything like that. Do I understand that if their note
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7 have been able to find that out?
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9 clear, MERS doesn't hold the notes except in the limited sense
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10 that if they're foreclosing, our rules require us to have
13 certainly have been easier for a borrower to find out who owned
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14 this loan, and one of the problems, and I'll be frank with you,
15 one of the problems is that, you know, I think that because the
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21 talk to.
25 people who know how to deal with mortgages, which are the
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1 mortgage companies, the servicers who are doing these things.
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2 So they can call up -- they can call the investors up, but the
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4 the servicer because that's the party that they've empowered to
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5 make those --
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7 MR. HULTMAN: They're mostly national banks. I mean,
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9 servicing in the country today.
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10 COMMITTEE MEMBER: So your role is, is if they
11 contact MERS, you're the one who tells them who the servicer is
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12 to do their loan modification for a --
17 modification or short sale does not happen, you are the entity
23 a lot of the noise in the press and just in general and the
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1 interest would be made and recorded in the land record.
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2 So if, for example, if we're serving the land records
3 for Fannie Mae as the investor and Chase is the servicer and
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4 they want to foreclose, typically today they will actually
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5 assign the beneficial interest probably to Chase, and that
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7 recorded before the assignment -- before the foreclosure
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9 have been people who have not done that and done it after the
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10 fact and they've been kicked out of court and rightly so.
14 MERS name.
16 witness?
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21 right?
23 calls every --
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25 could you tell this panel, I mean, this committee, that would
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1 help us understand -- help these people that have talked about
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2 these stories that they've given us this afternoon? What would
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4 MR. HULTMAN: I'm not -- I think anything that you
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5 can do to help enhance the modification process is probably
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7 borrowers are looking for. They're calling me up and saying --
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9 borrowers.
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10 So it's really focusing on the modification process,
13 are limited and the banks are limited when their net capacity.
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14 Only when they own the loan do they have the ability to make
20 lot of the activity is, trying to figure out programs that will
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1 not the structural procedural things is really where the focus
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2 of the legislature ought to be.
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4 COMMITTEE MEMBER: I do want to add one thing before
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5 we move on to more questions, and that is, I think you're
6 correct. May 2009 is when the legislation went into place that
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7 said that you have to provide notice to the homeowner about any
8 (inaudible).
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9 MR. HULTMAN: Thank you.
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10 COMMITTEE MEMBER: You were right on that.
11 COMMITTEE MEMBER:
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14 these other folks today, it seemed there were two things. One
17 through the system. They don't know who these people are, so
19 don't know. And by the time they get to them, it's too late.
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1 the bill saying, we can't find them and we don't have enough
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2 time to get to them so we can work something out. So what's
3 the answer?
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4 MR. HULTMAN: Well, I think -- first of all, I think
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5 it's not correct to say that they can't find them. I think
6 sometimes what happens is, is that the investors will tell them
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7 you need to deal with the servicer. And -- because I get this
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9 say, can you tell me who the investor of my note is. I'll tell
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10 them and I'll say, but, you know, they're going to just refer
11 you back to the servicer. su And the servicer is the one who
13 these things.
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17 who take out these loans to the people who invested in them,
25 possession. Those loan files are with the servicers who are
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1 collecting the payments every day.
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2 So they're really the only party who is into the land
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4 what the loan is and how -- and what's the payments that the
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5 borrower could make given their current circumstances. They
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7 things. The investors are not prepared to do that. That's why
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9 of that work.
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10 So, and, again, you know, I don't have -- I'm not
24 --
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1 COMMITTEE MEMBER: (Inaudible) first deed of trust
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2 (inaudible) --
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4 (inaudible) So we see every day how much mail is coming
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5 through, and I think the system is strained. I mean, I think
6 we're at capacity how many things we can do, and I think that's
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7 causing a lot of problems that you heard today.
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9 witness?
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10 COMMITTEE MEMBER: All right. Does anybody else want
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