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It seems like a year ago, pro-homeowner rulings like this were coming down once a month or so…then it seemed to happen weekly…now, appellate rulings. While the importance of the legal consequences of securitization, the recording of bogus notices and assignments, appraisal fraud and other topics discussed here cannot be downplayed, particularly with regard to a full or adequate forensic analysis or claims assessment. Neil (who is currently getting a little well deserved and needed R&R on the high seas), has repeatedly exhorted in seminars, radio broadcasts and here that successful litigation is about “winning at the beginning.” Get your ducks in a row and don’t wait until you get an eviction notice to try to do it. Personally, I espouse the KISS method, “keep it simple stupid” approach. That is to say…if you come out guns blazing with securitization talk, conspiracy theory and the creation of money business watch the Judge’s eyes glaze over…he’s a human being too. Keep it simple.
Who is the real lender not the “pretender” lender, who put up the money and who would actually be damaged by the alleged non-payment of the note? Or put another way who is the real beneficiary of the promise to pay or obligation. Reasonable questions… judge… that deserve answers. Or..Judge, if I wanted to payoff this note today, who is it that has actual authority to issue a satisfaction of mortgage? How’s that for simple and reasonable.
We know and have known and now the courts are starting to catch up to facts that “MERS admits it does not actually receive or forfeit money when borrowers fail to make their payment.” In fact, “MERS only has standing in the context of the motion to lift stay under the Rules if it is a real party in interest.” (See Fed.R.Bankr. 7017)
Consequently, as Judge Dawson puts it, “the parties cannot come to a resolution if those with a beneficial interest in the note have not been identified and engaged in communication.” Those of you who have been to our lawyers CLE workshops should remember that part of the securitization segment involves asserting that there are “necessary and indispensible parties” as a result of the securitization process that are missing from the proceedings. Hence the need for expedited discovery in part to identify the real source of funds(read: real lender), potential co-obligors and/or any other parties that may have a colorable claim or rights of subrogation because they in fact paid off the note and satisfied the obligation(perhaps even your Uncle Sam) . Of course, in the non-judicial states you have to initiate the action and force things into a judicial forum where the other side has to deal with the pesky little things like rules of evidence.
I have said in our seminars and been challenged, I have said to numerous lawyers in individual conversations that “just because it SAYS in the Deed of Trust that MERS is the beneficiary DOESN’T MAKE IT SO and they look at me like I am nuts. If you put up the money in return for the promise to pay(read:obligation) then you are the beneficiary, you are also the party that would be potentially damaged in the event obligation is not fulfilled. If you didn’t put up any money/consideration then you can’t be damaged and can’t be the beneficiary.
Which is why I almost stood up all alone in my office and started to applaud about midnight last night when I read Judge Dawson’s words, “MERS is NOT a beneficiary in spite of language that designated MERS as such in the Deed of Trust.” (pause to applaud here).Likewise, just because it SAYS “XYZ Financial” is the “lender” on the Deed or Mortgage doesn’t make it so either, who or where did the funds come from, think “source of funds” as opposed to “lender.”
Perhaps someone can really throw the state of Nevada a lifeline and file an action to invalidate all the previous foreclosures done in Nevada in the name of MERS…at a minimum maybe the state AG can stop them going forward. It would seem at a minimum that all those Notices of Default and Notices of Trustee sales that only named MERS as the beneficiary are/were arguably defective notice.