Florida Foreclosure Defense Lawyers Blog

What is going on in with all of the Foreclosure craziness? This has been the question for millions of homeowners dealing with the potential loss of a home right now. People have heard the horror stories of predatory lending, and the other stories of unqualified homeowners working with brokers to deceive lenders to get financed. But many mortgages fall somewhere in between, leaving big question marks in place of answers the housing market desperately needs.

As a greater number of questions are pouring in, however, searching for answers has become a daunting task. MIllions of homeowners are in a struggle to hold onto their loans while batting off multiple lenders. The problem is many of the original brokers and lending companies have since gone out of business or been the subject of criminal charges stemming from their faulty practices. Often times, the loans in question have been securitized into a mortgage-backed trust. The issue underlying this confusion is that no one knows whom the owner of the note and mortgage actually is. This is largely because of one four-letter acronym, MERS.

MERS (Mortgage Electronic Registration System), a service created to track mortgage transfers, was created in 1994. MERS replaced the old system of "walking" every important mortgage document to the County Clerk's office. With this shortcut in place, lenders were able to save millions of dollars in local recording fees and started transferring mortgages at a pace that, we would later learn, was far too much to handle. So grueling, in fact, MERS failed to properly follow state and local laws in documenting these transfers. Now when it comes time to foreclose instead of documenting each transfer, MERS allegedly signs the mortgage from the original lender to the most recent owner.Many courts are now deciding whether MERS has actual standing to foreclose.

There are things you can do to be prepared for or stave off a potential foreclosure. One of the most important is to communicate with your lender. If you are facing the prospect of foreclosure, contact a Florida Foreclosure Defense Lawyer or a Jacksonville Foreclosure Defense Lawyer today to determine what foreclosure defenses may be available in your specific case.

Recent news coverage has focused around the continuing saga in the foreclosure market and how banks have continued to use questionable foreclosure practices, such as robo-signing documents, when pursuing home foreclosures. Attention turns this week to a settlement from these Banks, and just how much and who that settlement will cover.

Undoubtedly, Banks will pressure for a settlement that releases them from nearly all-future liability. State's Attorney's General will be seeking the maximum in penalties, but are reluctant to settle claims that have not even become viable. One of the biggest determinants of banks liability, however, will be the extent to which the Mortgage Electronic Registration System, or MERS, takes responsibility.

MERS originally injected itself into the mortgage market in the mid-90's, when it was created to lessen the financial burden on mortgagee's to record property transactions - a process that can be costly. More recently, however, lawyers are challenging MERS's ability to bring foreclosure proceedings because they technically don't own an interest in the property and therefore do not have standing to initiate a foreclosure. Courts have also looked at the questionable documents filed by MERS attesting to this ownership will prove problematic during settlement talks.

Another separate issue is that in some situations, chains of ownership can't be followed backwards because some of the companies transferring titles either aren't around anymore or are restricted from backdating assignments.

So, if the release is a broad one, it might include many of the homeowners affected by Banks use of the system but would also make it hard to argue that MERS does not have standing to foreclose on those homeowner's. If the release is narrow, MERS has cause to celebrate, as it will not have to answer for later lawsuits prior to such suits even being investigated. This could mean the most onerous of claims could quite possibly go un-investigated altogether.

If you are facing a Florida Foreclosure Lawsuit, contact a Jacksonville Foreclosure Lawyer or a Florida Foreclosure Lawyer today.

Mortgage Electronic Registration Systems, or MERS, the company created in an attempt to streamline property transfers across the Country has flourished since its inception in the early 90's, now finds itself under investigation by multiple States' Attorneys General. Among the most recent to look into MERS business practices are AG's in Delaware and Massachusetts. MERS has promised to cooperate in these investigations.

Many questions surround MERS and its business practices, including whether their foreclosures violated various foreclosure laws and whether they skirted on millions in fees due the government. Those practices and fees are now at the center of what could be a massive settlement, talks of which are being spearheaded by a 50-state coalition of Attorneys General. But many have expressed reservations about structuring a settlement that would release MERS from widespread liability.

Courts across the country are now looking into whether MERS has standing to foreclose. Laws from states across the country often require a foreclosing party to have some form of ownership of the loan. But MERS is essentially a mortgage tracking system, so proving this ownership seems unlikely. Still, MERS has gained support in some state courts and the Minnesota legislature even passed a law giving MERS the express right to foreclose on properties.

With Courts in limbo over MERS and other issues, foreclosure activity is slow for the time being. If you are facing a Florida foreclosure lawsuit and your loan included MERS as the mortgagee, contact a Jacksonville Foreclosure Lawyer or a Florida Foreclosure Lawyer today to determine what potential foreclosure defense options may be available to you.

The Department of Treasury Comptroller of Currency, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the Office of Thrift Supervision and the Federal Housing Finance Agency have entered into a consent order with MERS, wherein MERS is being forced to correct the errors that have plagued foreclosure processes nationwide. In a just released 9 page document, the federal regulators found that MERS has committed serious errors and have experience multiple failures of its operations.

The consent order states that MERS employed unsafe and unsound business practices and exposed MERS members to "unacceptable operational, compliance, legal and reputational risks." Also included in the order are two findings related to MERS tracking and registering mortgage loans along with initiating foreclosures. Regulators found: 1) MERS failed to exercise appropriate oversight, management supervision and corporate governance, and have failed to devote adequate financial, staffing, training and legal resources to ensure proper administration and delivery of services to Examined Members.
2) MERS sailed to establish and maintain adequate internal controls, policies, and procedures, compliance risk management, and internal audit and reporting requirements with respect to the administration and delivery of services to Examined Members.

The Consent Order also lays out detailed requirements for MERS to clean-up its operational practices to prevent any future break-downs going forward. This is the first major finding that MERS foreclosure processes were flawed. If you are facing a Florida Foreclosure Lawsuit and you had a MERS loan, contact Jacksonville Foreclosure Defense Lawyer or a Florida Foreclosure Defense Lawyer today to see what foreclosure defenses may be available to you.

In what is becoming a bit of a trend, another state official has come to the realization that counties and states nationwide has been robbed of millions of dollars in recording fees through the use of the Mortgage Electronic Registration Systems, Inc. (MERS) system. Now, one is seeking to take action. Southern Essex District Register of Deeds John O-Brien has requested that all deposits from his district be removed from Bank of America and no future deposits be made to the bank, until they drop the MERS system.

O'Brien estimates that his county alone has lost out on more than $22 million in fees as a result of MERS and that Massachusetts overall could have lost out on as much as $200 million in fees. In his letter to the Massachusetts State Treasurer requesting the removal of his districts deposits from Bank of America, O'Brien stated he wants the deposits shifted to a community bank that does not utilize the Mortgage Electronic Registration System.

Finally, public officials nationwide seem to be catching on to the missed fees and potential for mortgage fraud caused by MERS. If you are facing a Florida Foreclosure Lawsuit and you had a MERS loan, contact a Florida Foreclosure Lawyer or a Jacksonville Foreclosure Lawyer today to explore what foreclosure defenses may be available to you.

Freddie Mac will no longer allow loan servicers that are managing Freddie loans to foreclose on a piece of property in the name of Mortgage Electronic Registration Systems, Inc. (MERS). This directive goes into effect on April 1.

The directive reads as follows, Freddie "eliminated the option for the foreclosure counsel or trustee to conduct a foreclosure in the name of MERS. Effective for Mortgages registered with MERS that are referred to foreclosure on or after April 1, 2011, Servicers must prepare an assignment of the Security Instrument from MERS to the Servicer and instruct the foreclosure counsel or trustee to foreclose in the Servicer's name and take title in Freddie Mac's name." Additionally, in states that require a servicer to record the assignment, the servicer is responsible to pay those fees. If your lender has initiated a foreclosure action on your home in the name of MERS, contact a Florida Foreclosure Defense Lawyer.

Foreclosure Fraud on Fox news

 

A local North Carolina Register of Deeds has announced that he will be consulting with the NC Attorney General's Office and the NC Secretary of State in order to recoup and estimated $1.3 million in lost revenue due to unrecorded mortgage assignments carried out through the MERS System. Guilford County Register of Deeds Jeff Thigpen points to the fact that since 2005, 47,552 deeds of trust have been recorded in Guilford County alone and the average loan on the MERS system is transferred between 2 and 4 times. Using the relatively conservative estimate that loans in Guilford County would be transferred twice, the lost revenue of $1,331,484 for the county.

Thigpen reasons that as the elected register of deeds he has "two primary responsibilities in land records: a sworn duty to protect the chain of title and a fiduciary responsibility to collect recording fees...MERS has undermined both." Thigpen also states that the lost revenue prevents local elected officials from reducing budget deficits and "maintain core services such as public education and public safety in this time of financial crisis." Currently, MERS is facing suit in California alleging that MERS members circumvented the land recording system and avoiding paying the state $60-120 billion in land recording fees.

Within the last few weeks MERS has instructed its members to stop foreclosing on homes in its name, certainly due to court rulings in several states that MERS lacks standing to foreclose on homes and suits questioning the validity of mortgage assignments made through the MERS system. Current estimates show that MERS may be involved in 60% of all US mortgage loans. If you are facing a Florida Foreclosure Lawsuit where MERS is involved, contact a Jacksonville Foreclosure Defense Lawyer or a Florida Foreclosure Defense Lawyer today to see what foreclosure defenses may be available to you.

To read the full Release from Guilford County Register of Deeds Jeff Thigpen click here.

A funny proposal about instituting a MERS like system to replace the traditional marriage recording system has been floating around recently and it shows just how arbitrary, ineffective and useless MERS actually is. The new system would be called "SERS" or the Spouse Electronic Recording System and would replace the tradition marriage recording system with a paperless system that allows for greater freedom to those people who would like to "leave their options open!"

Under the SERS system a SERS member could paperlessly "record" their marriage naming themselves as a nominee for a marriage without actually naming their spouse until just before the end of the marriage, which effectively says to the world "yes I am married, but I'm not saying to whom I am married." This gives SERS members the stability of the institution of marriage without the specific commitment of marriage.

SERS members will only be able to be married by official SERS officiants, but that shouldn't be a problem because almost everyone already is or can be a SERS officiant, all you must have the required officiant certification fee. The SERS system also allows unlimited marital swaps without notifying the spouse about the swap ahead of time. A Jacksonville Divorce Attorney and a Jacksonville Family Law Attorney think recording marriages through a SERS system would create the same sort of chaos and crisis in marriages that is did in the housing market.

Obviously, talk of the creation of a SERS system is purely for entertainment purposes but isn't it foolish that such a system exists to "record" and track the ownership of millions of mortgages! If you are facing a Florida Foreclosure Lawsuit contact a Jacksonville Foreclosure Lawyer or a Florida Foreclosure Lawyer today.

It appears as though the people in charge of running MERS have grown weary of the constant homeowners challenges to MERS standing to pursue foreclosure. In a just released announcement from MERS, the company plans to announce an amended to "Membership Rule 8" which will MERS members from foreclosing in the name of MERS and if member must foreclose in the name of MERS prior to that amendment, the member must be given express permission from MERS before it can foreclose in MERS name.

The announcement also states that all mortgages must be assigned out of MERS name before a new foreclosure action may be brought and it lays out procedures for updating or adding new "MERS Certifying Officers" who are authorized to execute documents on MERS behalf. The most troubling aspect of the MERS announcement is paragraph 4 where MERS instructs member to "ensure the accuracy of the information in the complaint and foreclosure affidavit that addresses, where applicable, the authorization under which a MERS Certifying Officer validly assigned the mortgage to the foreclosure note-holder." What were MERS members doing before these instructions?

This announcement underscores the problems with the MERS system that foreclosure defenses lawyers, including a Jacksonville Foreclosure Lawyer and a Florida Foreclosure Lawyer , have been talking about for months. If you are facing a Florida Foreclosure Lawsuit were MERS is the mortgagee, contact a Jacksonville Foreclosure Lawyer or a Florida Foreclosure Lawyer today to see what defenses may be available to you.

To read the full text of the MERS announcement click here.

lawmakers in the state of Virginia begin their new session, they will potentially have three new proposals designed to help Virginia homeowners who are facing foreclosure. Virginia is a non-judicial foreclosure state and has one of the fastest foreclosure processes in the country. The first of the proposed laws will give homeowners more time to raise potential, the second would necessitate lenders getting the approval of a judge before seizing and auctioning off a home, and the third would give homeowners a eleventh-hour opportunity to catch up their payments in order to avoid foreclosure. Some lawmakers and groups such as the Virginia Bankers Association are opposed to the proposed laws saying that any of the proposed changes would handicap the process and cause needless delays.

One of the most drastic changes proposed to the requirement that banks and other lenders would be required to record all transfers of ownership of mortgages in the county land records. While this would make it much easier for homeowners to find out who owns their debt, it runs counter to the current system used by many lenders who employ Mortgage Electronic Registration Systems or MERS database to record these transfers. MERS has been one of the most criticized entities during the foreclosure crisis, as its opponents say the lack of suitable transfer of ownership records lies at the heart of the current crisis.

A Jacksonville Foreclosure Lawyer can only hope that Virginia lawmakers pass some from of change to help struggling homeowners protect their homes. If you are facing a Florida Foreclosure Lawsuit, contact a Jacksonville Foreclosure Defense Lawyer or a Florida Foreclosure Defense Lawyer today.

Reston, Virginia based Mortgage Electronic Registration Systems, otherwise known as MERS, is now being investigated by Federal bank regulators Comptroller of Currency John Walsh recently announced. The probe will "assess MERS' corporate governance, control systems and accuracy and timeliness of information" that the company uses.

MERS was designed to enable lender package and sell mortgages without recording those transactions in county property offices, which results in massive monetary savings for lenders. In recent months MERS has come under fire for its role in allowing banks to cut corners when processing foreclosure cases, sometimes even prosecuting foreclosures in its own name. Many of MERS critics say it doesn't have the standing to act on behalf of the real mortgage owners in foreclosure cases.

This is potentially another blow to the already beleaguered company. MERS is currently facing a lawsuit from the state of California for unpaid land recording fees, detailed by a Jacksonville Foreclosure Lawyer here. If you have a Florida foreclosure lawsuit where MERS is involved, contact a Florida Foreclosure Lawyer today to explore what defenses may be available to you.

The mortgage service industry has commenced an aggressive campaign to bolster the legality of securitized mortgages. When a mortgage is securitized it is bundled and sold to investors on the stock markets. Securitized mortgages are currently a grey area of the law because there is much confusion as to who is actually the holder of the mortgage with the right to foreclose on a homeowner in default.

The main focus of this increased lobbying effort in Washington is Mortgage Electronic Registration Systems (MERS). MERS is a private database used by almost every lender to map out the chain of ownership of mortgages as the mortgages are securitized and traded around the world. This allows the industry to buy and sell mortgages as often as they wish without having to spend the money to record the mortgages or file the necessary paper work.

However, MERS is not merely a mortgage tracking service. MERS is listed as the holder of the mortgage in many of the foreclosure cases currently pending in Florida and around the country. Recently, there have been many legal challenges to MERS serving in this capacity because MERS is only a database and, therefore, theoretically, cannot be the holder of the mortgage.

Lobbyists for the lending industry are seeking legislation that would validate the legality of MERS. If the lobbyists were successful, all of the suits in which MERS is a defendant would immediately become moot. This would effectively end the lawsuit pending in California against MERS in which the State of California is seeking between $60 billion and $120 billion from MERS for unpaid recording fees. This legislation would also prohibit any other state from filing a similar suit. Additionally, the lobbyists are also encouraging a proposal that would make MERS a national registry to track the transfer of mortgages nationally.

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With daily developments in the fight to stop foreclosures and almost every local and national news outlet using acronyms like HAMP, HARP, HAFA, Fannie and Freddie in their reporting one major name is emerging at the center of the foreclosure mess: MERS.

MERS, short for Mortgage Electronic Registration Systems, was created as a way to save money on mortgage recording fees and pass those savings onto homeowners. Instead what MERS has done is cloud the ownership interests in millions of homes nationwide. A Jacksonville Foreclosure Lawyer found a great synopsis of the origination and operation of MERS. For full text of the MERS article click here.

Thanks to Foreclosureblues for the content.