Good news for homeowners: 9th Circuit Court whacks MERSCORP

The Ninth U.S. Circuit Court of Appeals has reversed part of a five-count decision rendered by the Multi-District Litigation Panel (led by U. S. Senior Judge James Teilborg, Arizona) as to the case involving Mortgage Electronic Registration Systems, Inc. and the use of so-called “MERS Certifying Officers” (numbering over 20,000) to execute assignments and other documents that pose serious challenges to the chains of title to every piece of property in America that the MERS business model has touched.

In Robinson et al v. AHMSI et al (No. 11-17615; the Defendant’s list looks like a Who’s Who of a huge cross-section of proponents of the MERS business model), the class action (which later evolved into a huge panel that virtually screwed homeowners in Arizona, California, Nevada, Oregon and South Carolina), took their case to the 9th U. S. Circuit Court in San Francisco to re-argue their points to the “higher authority” (a 3-judge panel), who  released its 31-page opinion (authored by Judge W. Fletcher of the appellate panel) on June 12, 2014; dismissing parts of the original MDL panel’s ruling, while affirming in part and reversing in part a key provision linked to Arizona Revised Statutes (A.R.S.) 33-420, which covers the recordation of documents under Arizona Real Property Law (Count I).  The portion that was reversed was remanded back to the U. S. District Court for further hearings.  Each side got to pay for their own attorney’s fees.

Now that you’ve gotten a little background on the case, now it’s time to discuss the upside of this ruling … 

Part of the problem with what the 9th Circuit actually received in the appellate submissions from the concerned parties was missing some key “undisclosed” information about MERS.  Let me break it down for you (what was missing and what was key here):

1. It is this author’s opinion that neither the MDL Panel nor the 9th Circuit got the truth about the real MERS.  There seems to be some confusion between MERS and the MERS System when there shouldn’t be.  MERS IS the MERS System!  The use and design of the MERS System was referenced in Cervantes v. Countrywide Home Loans, Inc., 656 F.3d 1034, 1039 (9th Cir. 2011).  Half of the stuff pertaining to MERS in Cervantes wasn’t exactly the truth either, but misrepresentations based on what MERS’ counsel portrayed MERS as a matter of convenience to “keep MERS in the game”.

2. The “Background” on this case, proffered by the court, has again run into contradiction with the ruling issued in the MERSCORP v. Robinson case in the U.S. District Court in the Central U. S. District of California (go to download a copy of the ruling).  In that case (not to be confused with the Robinson family in the MDL case at bar), U. S. District Court Judge Philip Gutierrez appears to have eviscerated MERS and MERSCORP’s ability to reverse a state judge’s quiet title action and expungement of a deed of trust, apparently contrary to key discussions within the 9th Circuit’s ruling.

3. MERSCORP’s rules of membership (2009), which Robert M. Janes’SHELLGAME MERS, Contrived Confusion spells out in detail, appears to indicate that MERS has no members and the contractual rights given to the so-called “members” are in conjunction with MERSCORP Holdings, Inc., who can choose to ignore MERSCORP rules anytime they wish. This doesn’t say much for the MERS business model, which MERSCORP’s rules equate MERS to MERSCORP, whenever the term MERSCORP is used.  Yet MERSCORP (a corporation distinctly separate from MERS) is nowhere to be found in any recorded mortgage or deed of trust in America.  What does that say about the MERS business model?

4. Page 10 of the 31-page ruling claims that MERS has members, when this is patently false!  If MERS had “members”, why then do bankrupt lenders in Chapter 11 seek repudiation of “MERSCORP executory contracts” and not “MERS executory contracts”?  Because there are no “MERS executory contracts” because MERS and MERSCORP are distinctly separate entities.  MERSCORP holds the contracts for the MERS business model, known as the MERS System. I don’t for a minute believe that the Courts honestly see the real facts in this way.  Gutierrez’s ruling in Robinson comes closer to the truth as to what actual authority either of these entities has that the 9th Circuit ever will (at this point).

5. I think MERSCORP knows it’s losing the Robinson case in Central California.  How do I know this?   Little “birdies” are telling me that MERSCORP is trying to make a deal behind the scenes to get the Robinsons to modify their loan in exchange for a stipulated agreement to reverse the state judge’s quiet title rulings.  It will be a cold day in hell before that happens.  That’s how I know MERSCORP is losing this case.  MERSCORP doesn’t have any right to even suggest modification of anything because it doesn’t OWN anything to begin with.  That’s like the average homeowner calling me up and asking me to modify their loan when I don’t own it.  That’s the same position MERS and MERSCORP are BOTH in!   What they’re asking for is absurd and ludicrous!

6. So based on the assumptions of the 9th Circuit AND the MDL Panel, MERS has members. MERSCORP still tells its members that their “officers” can sign for “MERS” as an Assistant Secretary or Vice President, with the appearance of some vested authority; however, what I think is going down here is a scheme and artifice to defraud the homeowner (RICO), because two or more parties are involved in the manufacture of the assignments used to rip off these homeowners who had no idea what MERS was when they signed documents at the closing table.  Sadly, the homeowners didn’t read what they signed BEFORE they signed it and didn’t bother to ask questions even if they did read what they signed!  These signed documents is what gave MERS the impetus to claim it had some contractual authority in the first place.

7. Even the 9th Circuit admits (from Pages 10-12 of its ruling) that cases involving MERS are all over the map on both state and federal levels and further cites numerous disadvantages of this “fly-by-the-seat-of-your-pants” business model, known as MERS.  The 9th Circuit even questions the validity of the land records across America that contain these recorded MERS documents.

8. As I maintained on the Alex Jones Show last week, the recording of MERS-related assignments creates all sorts of issues in the land records, which, as I maintain, if allowed to continue, will corrupt every county’s real property records to the point where they won’t be worth keeping!  The only way that you stop MERS-related assignments from being recorded is to stop the MERS System from operating.  You don’t replace it with a government-mandated and operated central registry system either.  You shut down MERSCORP and MERS by connecting the dots criminally.  Look up the RICO statutes and understand that when two or more parties submit fraudulent documents into the land records with the intent of defrauding the homeowner, it’s a felony in many states.  This is what A.R.S. 33-420 is all about.

9. The signors who sign these assignments have no personal knowledge of their contents whatsoever!  Further, the notaries who acknowledge them appear to be committing false swearing by acknowledging capacities that may be rooted in obfuscated or non-existent powers of attorney.  The documents themselves, despite being recorded, are NOT self-authenticating.  Yet banks’ attorneys wave them around in court when the time comes to steal the homeowners’ properties!  Depositions taken of robosigners in the past have clearly revealed this chicanery.  The courts are having a difficult time trying to decide whether the bank is wrong because they hold bank stock and they’ve been brainwashed as part of a larger scheme to apparently hold the homeowner accountable for signing the mortgage note in the first place, despite what happens to it afterwards.

10. Again, I note, if MERS hasn’t done anything wrong, why is everybody suing it?   Apparently the 9th Circuit sees eye to eye with me on that!

Here’s a look at the Count that was reversed …

1. Count I: Ariz. Rev. Stat. § 33-420

The CAC seeks damages and declaratory relief based on alleged violations of Arizona’s false documents statute, Ariz. Rev. Stat. § 33-420. The statute provides in relevant part:

A. A person purporting to claim an interest in, or a lien or encumbrance against, real property, who causes a document asserting such claim to be recorded in the office of the county recorder, knowing or having reason to know that the document is forged, groundless, contains a material misstatement or false claim or is otherwise invalid is liable to the owner . . . of the real property for the sum of not less than five thousand dollars, or for treble the actual damages caused by the recording, whichever is greater, and reasonable attorney fees and costs of the action.

B. The owner or beneficial title holder of the real property may bring an action pursuant to this section . . . as provided for in the rules of procedure for special actions. This special action may be brought based on the ground that the lien is forged, groundless, contains a material misstatement or false claim or is otherwise invalid. The owner or beneficial title holder may bring a separate special action to clear title to the real property or join such action with an action for damages as described in this section. . . .

D. A document purporting to create an interest in, or a lien or encumbrance against, real property not authorized by statute, judgment or other specific legal authority is presumed to be groundless and invalid.

The Court writes:

The CAC alleges that defendants filed false notices of trustee sale, notices of substitution of trustee, and assignments of deed of trust. The CAC alleges that these documents were notarized in blank and “robosigned” with forged signatures. Appellants seek damages and declaratory relief against clouding of their title based on these allegedly forged documents.

Writing in 2011, the MDL Court dismissed Count I on four grounds. None of these grounds provides an appropriate basis for dismissal. We recognize that at the time of its decision, the MDL Court had plausible arguments under Arizona law in support of three of these grounds. But decisions by Arizona courts after 2011 have made clear that the MDL Court was incorrect in relying on them.

Nothing but mass confusion … 

The 50 States are all over the board on what the statute of limitations is for contesting fraudulently-recorded documents in the land records.  While the Texas Civil Practice and Remedies Code Chapter 13 only gives a litigant two (2) years to contest suspect documents, Arizona (according to this ruling) allows four (4) years, citing the ruling made by the Arizona Court of Appeals in Sitton v. Deutsche Bank National Trust Co., 311 P.3d 237, 241 (Ariz. Ct. App. 2013).  In most instances however, the Courts are still hanging on the premise that the homeowners borrowed the money and are obligated to repay their loans.   While everyone is screaming “FRAUD!” most homeowners don’t have the money to: (a.) repay their loans; and (b.) to mount a legal defense to fight the bank’s dastardly deeds.  Thus, those who do have the money to litigate (or go pro se) are setting contradicting case law all over America, some good, some bad.  Because the banks are controlling the courts, many of the bad case outcomes are published, while the quiet title actions and good case rulings go unpublished and thus are not cited when the circumstances would favor the homeowner (who in many instances may think they’re entitled to damages for everything under the sun).

If you’re in Michigan or Minnesota, the courts there are definitely pro bank.  New York courts appear very intolerant of banking practices, especially foreclosures, beating up on banks when it comes to non-compliance in securitization issues.  Arizona seems pro-bank until you get a case like this in play.  Now the homeowners (in class formation) get to go back in and “prove” that the documents that were recorded in the land records were fraudulent.  Whatever the case, the sand states (which were the hardest hit going in) have more case law coming out of them than other states in the union at this time because it takes so long to process these cases (back to the old saying, “The wheels of justice grind slowly.”).

Of significance …   

As homeowners, we have the right to contest our contracts.  When the notes are securitized, the banks and their attorneys claim we have no right to contest the securitization issues because we’re not a party to the assignment and securitization process, yet our names are listed on the assignments (and signed on the promissory notes).  Need I remind the banks, YOU SOLD AND CREATED CREDIT DEFAULT SWAPS ON UNSIGNED NOTES AND TRADED THEM BEFORE THE BORROWERS SIGNED THEM AT CLOSING … WITH NO MAKER ON THE NOTE!  Then your attorneys go out and downplay homeowners’ rights in order to cover up what you did in violating your own pooling and servicing agreements!

Then the banks attempt to “have their cake and eat it too”, which goes to the saying, “You can’t have it both ways” … by challenging the homeowners’ rights to quiet their titles after  what the banks and MERS did to screw them up!  Looking at the top of Page 24 of the new ruling appears to indicate that quieting title IS INDEED a homeowner’s right, ruling that based on current case law, the appellants in this matter have standing to sue!

It also appears that the 9th Circuit disagreed with the MDL panel (who I believe are deeply rooted into the banking interests) on the pleadings submitted by the appellants as being deficient against robosigning practices.  Robosigners and surrogate signers affix their signatures to documents at a rapid-fire pace without having any knowledge as to their contents.  The robo-notaries then affix their seals (whether in the presence of the signors or not; with no alleged journal entry if required to procure such) to these documents claiming that the signor is acting in some “authorized capacity” for MERS, when in fact, MERS is only the “business model” with no interest in the deed or note (only a nominee by contract), as noted in California’s Robinson case; thus, the signors’ lack of knowledge or false swearing by the notary appears to create a myriad of issues that are certainly poised for litigation.  The 9th Circuit apparently felt that the MDL Panel didn’t genuinely examine the entire situation because of the reversal on Count I.

So here we are … back to the chain of title and the land records.  Right where I’ve always maintained the real issues lie.  Attorneys for the appellants take note … only the manufacturers themselves can help you bring the truth forward.  Time to depose a robosigner or two … and their notaries.  If the notary was not present or doesn’t have a journal of record to attest to the signing … someone’s in trouble, aren’t they?

To that end, on Pages 24 and 25, the Court specifically wrote:

Further, the CAC alleges that the document substituting a trustee under the deed of trust for the property of Nicholas DeBaggis “was notarized in blank prior to being signed on behalf of U.S. Bank National Association, and the party that is represented to have signed the document, Mark S. Bosco, did not sign the document.”  Still further, the CAC also alleges that Jim Montes, who purportedly signed the substitution of trustee for the property of Milan Stejic had, on the same day, “signed and recorded, with differing signatures, numerous Substitutions of Trustee in the Maricopa County Recorder’s Office . . . . Many of the signatures appear visibly different than one another.” These and similar allegations in the CAC “plausibly suggest an entitlement to relief,” Ashcroft v. Iqbal, 556 U.S. 662, 681 (2009), and provide the defendants fair notice as to the nature of appellants’ claims against them, Starr v. Baca, 652 F.3d 1202, 1216 (9th Cir. 2011).

It should be noted that Mark S. Bosco, of Tiffany & Bosco, is a noted foreclosure mill in Arizona.  The pattern to be noted here is that the law firm aiding in the foreclosure process, whether judicial or non-judicial, is involved in the manufacture and processing of the document (that’s actor Party 1).  Then other individuals (Parties 2 and 3, being the other signors and notaries) attest to the creation of the document by attesting that the facts are true (at the rate of 350 documents an hour, with no personal knowledge of the facts they’re attesting to and acknowledging).  This process is what got Lorraine Brown 5 years in Club Fed … and the MDL Panel poo-poohed this off, according to the 9th Circuit.  Frankly, the banks’ attorneys should know better than to get involved with the robosigning and document manufacturing process.

Need I remind you, based on my previous research, your day is coming. 

Thus, the appellants get to fight another day.  Better be very, very thorough about your pleadings this time, eh?  Leave no stone unturned!  Do your homework!

This post originally appeared at Dave Krieger is a former major market radio news reporter and news director and television news reporter/anchorman and investigative journalist, who won national and state news awards from Associated Press Broadcasters. Dave was a former member of Radio and Television News Directors Association. The newest version of his book, Clouded Titles, is 396 pages of updated information about the aspects of foreclosure defense, strategic default, quiet title actions and county land record functions; coupled with a detailed Index and Table of Case Citations and comes highly regarded by attorneys.

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