What is MERS and why is it on my title?

What is MERS and why is it on my title?

TA Webster

     "I believe that banking institutions are
more dangerous to our liberties than standing armies. If the American people
ever allow private banks to control the issue of their currency, first by inflation,
then by deflation, the banks and corporations that will grow up around the
banks will deprive the people of all property until their children wake-up
homeless on the continent their fathers conquered." -Thomas Jefferson,


     As most of us already know, the economic
tsunami that hit this country has reverberated around the globe. Capitalism was
put down without even so much as a whimper and out national debt is hovering
somewhere just shy of 13 TRILLION dollars. I do not believe the financial
crisis happened on accident. So why are banks rewarded for poor loan
underwriting decisions while everyone else gets to pick up the bill? Why do
corporate executives receive such hefty bonuses for making such a mess of things?
If I screw up on my job I get fired. When you work on Wall Street and have
friends on Capitol Hill making that kind of money seems easy, but it does come
with a price.  


     It was not until I researched my own chain
of title in the Clerk of Courts office that I discovered a company called MERS
was on my mortgage. This was a total surprise because I never dealt with MERS
and had no clue as to who they were and what they did. Surely there must be an
explanation I thought. After gathering copies of everything that was in public
record I called the title company that closed our loan to get a copy of our
title policy. Unfortunately they went out of business but I did manage to
retrieve a copy of my policy directly from Chicago Title Insurance Company (CTIC),
the underwriter. What I found was amazing!


     Our loan servicer had not been too helpful
up to this point. I had lost my job in the housing industry and moreover, in
Florida, the industry just evaporated. I knew we were in for hard times. I kept
seeing government figureheads on the cable news channels talking about programs
designed to “help homeowners stay in their homes.” This was great news… so I


     The first thing our loan servicer told us
was “you need to be at least three month behind in your payments before we can
assist you”. This must have been the most absurd comment I had ever heard in my
life. I am being honest and upfront, not wanting to shirk my responsibilities
but looking for information on the program that then Treasury Secretary Paulson
and President Bush were mentioning. After all, if the President of the United
States and the Treasury Secretary say there is a program to help homeowners it
must be available, right?


     Since we paid for an appraisal (a
requirement of the lender) and we had not been privy to anything regarding the
appraisal process, I questioned the fitness of the appraisal and suspected
there may have been bias, or appraisal fraud which amounts to usury. I spoke
with a gentleman in the executive resolution group who told me they had not yet
heard of any such “help for homeowners” program out there. I was stunned! I
sent him an email with a link to the video… surely this guy has an internet
connection right?


     I was ready and willing to pay for the
home, but I wanted the house re-appraised as I did not want to pay a penny more
than what the home was worth. At the peak of the market the largest home in our
community (about 3,000 sq. ft. under air) sold for about $300,000 or $100 per square
foot. At the time of purchase the home did not have a pool. That same home
recently sold for $140,000 or $46 per square foot with a new in ground concrete
heated pool. How am I going to compete with that?


     The servicer’s idea of a solution was to take
the house and sell it for pennies on the dollar on the courthouse steps. Heck
no, if anyone was getting that kind of a deal it sure as heck was going to be


     I was told by the loan servicer that they
did not have the authority to modify the principal balance (as I had heard
about on the news) because the investor would not allow it. When I asked my
loan servicer “who is the investor of our loan” they replied Freddie Mac
(FHLMC). I called Freddie Mac and they told me to call my loan servicer. After
weeks of trying to figure out who actually owned my loan and why it was so
terribly difficult for me to find them I started researching the internet for
clues. Lucky for me I found Neil Garfield and his Living Lies website (www.livinglies.wordpress.com).


About Neil Garfield: Neil F. Garfield, M.B.A., J.D.,
61, is the winner of dozens of

academic awards, a popular speaker, and author of
technical treatises on law and

economics. He has come out of retirement with a bang
and financial institutions

should take note. He knows them from the inside out,
who the deciders are, and how

they arrived at a catastrophic scheme to defraud,
people, agencies, institutions, and

governments all over the world. The former consumer advocate,
trial attorney, and

economist says that he “can’t watch this meltdown
without lending a helping hand to

those in distress.” Appearing on TV, Radio, multiple
blogs, and live appearances,

Garfield offers bold and sound advice for dealing with
the “largest economic fraud in

 human history.”


     Up to this point my beef was with my lender
requiring me to pay for a bogus real estate appraisal. It is ironic because you
sign a stack of papers a mile high when you get financing to buy a home and
again at settlement but there is nary a peep about the appraisal. Why is that?


     Since information regarding home sales and
valuations are captured in public record (deeds, mortgages, property appraiser
valuations and tax roll valuations) why are consumers required to pay for it
while simultaneously propping up the companies that are reaping such huge
profits from vandalizing our appraisal and title industry. Remember, we are
talking about public record. 


the time I thought the greatest injustice was being required to pay for a
product (an appraisal) that contained no warranties, no representations, no
disclosures… no nothing. I was wrong, there was something greater. It just took
time to notice it. I still believe appraisal regulation is as important as making
sure our food supply does not become tainted and that lead is not put into our
children’s toys. Just like the S&L crisis and FIRREA that followed,
congress can put up the “façade” (appearance) of regulation while leaving
loopholes for their banking constituents where nobody else will ever find them.
Politicians closest to the action are privy to crafting the rules, unless they
are subject to an emergency closed session of Congress whereby they are
instructed to sign a complex bill without having ample time to read it OR there
will be upheaval and riots and martial law.


     The E-AppraiseIT/WAMU debacle is a great
example. In short New York’s attorney general accused Washington Mutual of
pressuring a rather large AMC (Appraisal Management Company) to deliver
inflated home values in order to justify making loans, a practice that tens of
thousands of appraisers have complained and petitioned about increasingly over
the years. The suit was filed by Attorney General Andrew Cuomo and did not name
WaMu as a defendant. Instead, Attorney General Cuomo cited First American Corp.
and E-AppraiseIT (a subsidiary of First American) as having engaging in
“deceptive, fraudulent and illegal business practices.”


The back story is this; the non-profit appraisal institute is selling
out its own members to a for profit subsidiary that they own that creates or
mimics information straight out of public record. Let me repeat – Public
Record. This of course is in addition to other large AMC’s that are selling out
the American people from our own public record. Appraisal regulation is so
flaccid that state regulators have basically all but ignored the tens of
thousand of “honest” appraisers that were literally run out of the industry
because of the AMC (appraisal management company) loophole. In essence
(literally), the housing market just went up, up, up and away!  

     Seasoned appraisers with many
years experience were being replaced with “compliant” less seasoned appraisers
(mostly rookies) who accept valuation assignments for half the fee. The AMC
takes the other half. AMC’s, data portals and AVM’s (automated valuation models
– or in other words artificially generated computer junk) share some of the
blame in the housing crisis but they have received very little attention for
their instrumental role in the current financial maelstrom.

     Congress has now enacted the HVCC
and IVPI. Those are the Home Valuation Code of Conduct and the Independent Valuation
Protection Institute.
Some would argue that this just more of
the same old tired legislation that gets put forth and subsequently gutted like


     I submit there will never be any meaningful change in legislation until
we first examine the new regulations regarding real estate appraisals and
examining carefully the inner-workings of AMC’s, data portals, AVM’s and find
out whether or not any of the aforementioned have caused adverse effects on
housing prices via biased appraisals and “cascading values,” thus making it
easier for banks and lenders to shop for appraisers (comp checks) that played
ball to get whatever was needed regardless of whether or not they had to rig
the system of accomplishing this feat.


     If you find one of the top
banking institutions like WaMu engaging in practices such as this – chances are
more than a handful of others were too. Now instead of hand-picking their favorite
appraisers (wink wink), lenders are supposed to stay “arms length” from the
appraiser. This means no comp checks, no partial submits, no shopping for your
number, no unlocking secure digitally signed appraisal docs to change numbers…
no more games. The question to ask is how can we trust that our elected
officials will enact meaningful legislation regarding appraisal regulation
after they neutered FIRREA? Many experts in the appraisal industry suggest that
if FIRREA had been left alone “as is” this crisis would not have happened.
FIRREA stands for the Financial Institution Reform Recovery Enforcement Act,
sounds grand doesn’t it?


     Often times a bona fide appraisal
was not even necessary. A lender could pay a waiver fee and be done with it or
rely on an AVM (computer generated algorithm – trash, not the same as a bona
fide appraisal) to project the price you needed. Works great on the way up. On
the way down, not so bueno.


     So why are consumers required to
pay and upfront fee of $300 for a biased and rigged appraisal? Seems like a
very self-serving interest to me. This is not even considering the fact that AVM’s
and data portals are simply a compilation of public record. Property value
information is stripped from local property appraiser’s office and tax
collector’s office websites and inserted into a fancy data model and voila’


     Combine this practice with tight
zoning, land-use, lack of adequate supply of “workforce” housing, development
impact fees, wetlands fees, this fee that fee & other fees and its no
wonder why “affordable” used to mean $250,000. Was there not enough land left
in America to supply homes for working people at working people prices?    


     It only takes one house in the
neighborhood to set the new Guinness Book world record for highest sales price
and there goes the neighborhood (and city and county) comps. The Appraisal Management
Companies have literally hijacked the appraisal industry and what’s worse… no mention
of the 10,000+ appraisers that have signed petitions to express concern about
pressure to “hit the number” or risk losing work. A lot of people were displaced
in that side of the business, for being honest about property values. Many in
the appraisal industry say that the cure (HVCC) is worse than the disease of the
previous system.  


     After spending more than 12
months looking back at appraisal regulation I did however, find something even
more appalling. MERS (the Mortgage Electronic Registration System) has been recorded
on over 60 Million mortgages in the US. The company does not and has not ever owned,
transferred or conveyed any “beneficial interest” whatsoever in the notes or
mortgages that are recorded in their name. They are considered to have only the
interest of a “straw man” in many states.


     In a nutshell, mortgages are the
security instruments (where you pledge your home as collateral) and notes are
the promise to repay the loan. Either one is not much good without the other. So
instead of vaulting the original note like they did before the advent of MERS,
notes were re-packaged and over insured (sometimes up to as much as thirty
times the value of the asset/home) so that they could reap compensation well
above the normal remuneration that is required to be disclosed on the
settlement HUD-1 statement and Truth In Lending disclosures. MERS is listed on
record as a way to hide the real parties of interest.

     Enormous profits were made by
swapping notes dozens of times and when the asset no longer performs and the
owner defaults, the credit default swap insurance kicks in and there is yet
more insane profit to be retrieved from the foreclosed property.


     So it seems that in an effort to
cash in on the once booming business of home mortgage lending, some major banks
and lenders were willing to intentionally turn a blind eye towards (or commit
outright fraud) in what is supposed to be an “unbiased” appraisal and allowed appraisal
regulation to suffer (amongst other things) so that Wall Street could package
and sell much larger pools of investments to unsuspecting chumps all over the
world under the guise of AAA rated investments and avoid disclosing who the
“real” lender or “holder in due course” is on the transaction. Not to mention the
fact that MERS has created “toxic titles” on more than 60 Million homes in the
United States.    


     I recommend that everyone tell
their friends and family to check their local clerk of courts office and obtain
copies of their recorded mortgage and inspect the document in paragraph C or D
to see if the words MERS appears. If yes, try obtaining a copy of your title
insurance policy to see if MERS was insured as your lender. If yes, know your
rights, do your research and challenge everything.

     Visit www.livinglies.wordpress.com,
and http://tawebster.spaces.live.com
to find out what is really happening with the mortgage and bailout fiasco. In
addition I have posted The MERS report by University of Utah’s Professor
Peterson in my “public” folder. Thank you and may GOD Bless you, your families and the United States of America!   


2 thoughts on “What is MERS and why is it on my title?

  1. Consider this; Chase bought WAMU in September of 08 for $1.9 billion dollars. They got a bank with almost $310 billion in assets and $188 billion of it bank deposits. Chase will tell you that the deal wasn’t that great as they had to absorb a hemorrhaging mortgage portfolio of $176 billion that they immediately wrote down by $31 billion. That’s true, but hides what really is going on.If you ignore all the other debt and assets, Chase got $176 billion in home loans for $1.9 billion. That’s just over 1% of face value. Assuming an average loan balance of around $300,000, that’s almost 600,000 mortgages and corresponding homes. That means they paid an average of only $3,000 for each of those loans. Even if they foreclose on the ENTIRE portfolio, do you think they can make money by reselling houses they got for $3,000 each? In January of 2008, Bank of America paid $4 billion for Countrywide. Countrywide serviced about 9 million loans valued at $1.5 trillion dollars. Run the numbers!

  2. In November of 2008, AIG answered a request from the SEC that required them to explain the inner workings of Credit Default Swaps. While they appear to have finessed certain issues, this is the clearest glimpse of how it worked;There are several classes of transactions but each of them involves some “delivery” of the underlying “performance obligation.” Thus any claim from, for example, US bank as Trustee for MBS series XXXX, would be a nullity if they received payment under a CDS contract (in addition to the fact that the “Trustee” never owned the “underlying” loans in the first place). And it is quite apparent that performing loans were also paid off if they were part of an over-collateralization scheme, which was prevalent. So even mortgages that are current in their payments may have been paid off by AIG, and probably AMBAC and other insurers. And of course the money for these payoffs came from the US Taxpayers who now own around 80% of AIG.What would be prudent and logical is for the banks that sold this toxic waste to buy it back and for a lot of people to go to prison.

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