Massachusetts Supreme Judicial Court Deciding Hundreds of Years of Real Property Law Regarding MERS

Massachusetts Supreme Judicial Court Deciding Hundreds of Years of Real Property Law Regarding MERS

By Daniel Edstrom
DTC Systems, Inc.

In Eaton vs. FNMA, the Supreme Judicial Court is asking for additional briefings to help with the following “issue”:

1/16/2012 #17

ORDER :Having heard oral argument and considered the written submissions of the parties and the various amici curiae, the court hereby invites supplemental briefing on the points described below. Supplemental briefs shall not exceed fifteen pages and shall be filed on or before January 23, 2012. 1. It has been claimed that requiring a unity of the mortgage and the underlying promissory note, in order for there to be a valid foreclosure, would cloud any title that has a foreclosure in the chain of title, regardless of how long ago the foreclosure occurred. The parties are invited to address whether they believe that such a requirement would have such an effect, and if so, what legal or practical measures exist that might limit the consequences of such a requirement. 2. It also has been suggested that, if the court were to hold that unity of the mortgage and note is required under existing law, the court’s holding should be applied prospectively only. The parties are invited to indicate on what authority they believe (or do not believe) the court could make such a holding prospective only.

Why Did the Banks Need to Falsify and Forge Fabricated Documents?

Why Did the Banks Need to Falsify and Forge Fabricated Documents?

Posted [on LivingLies] on January 5, 2012 by Neil Garfield

The investors who purchased David Stern’s foreclosure mill have taken the extraordinary step of announcing publicly that they had been duped into buying a “criminal enterprise.” Obviously they didn’t want to get caught up in the dragnet of prosecutors looking for convictions. Nobody would spend $60 million like these investors did and then announce to the world that not only was it worthless, it was worse than worthless. It turns out that once they owned it they discovered that the entire enterprise was based upon criminal and other illegal or improper acts. It will soon be obvious that virtually all the foreclosure mills operated identically to Stern because they were owned and operated by the same people.

Those criminal acts were all about pushing foreclosures through the system. The end result of foreclosure is that somebody gets the house upon entry of a “credit bid” which is to say that they don’t pay cash, they just submit a “bid” based upon the fact that the property was the collateral for money that was due them. Since Stern was not taking the homes, and it is obvious that others were taking the homes, the question is why did they need to go through all those gyrations and subject themselves to prison time if the mortgages were legitimate? Continue reading “Why Did the Banks Need to Falsify and Forge Fabricated Documents?”

In Re Sutter Appeal in Michigan – No Mortgage Exists

In Re Sutter Appeal in Michigan – No Mortgage Exists

By Daniel Edstrom
DTC Systems, Inc.

Here is another case of a fabricated loan document.  Appellants U.S. National Bank and Saxon Mortgage Services, Inc., appeal the order of the district court overturning a judgment of the bankruptcy court granting them an equitable mortgage on property owned by Debtors Daniel and Sheryl Sutter.  The appeals court decision summary:

The district court correctly held that no mortgage, equitable or otherwise, exists on the Sutters’ property. Therefore, we AFFIRM the judgment of the district court..

Download the order here:

Legal Standing At Inception

Legal Standing At Inception

By Daniel Edstrom
DTC Systems, Inc.

No I am not an attorney and no I am not providing legal advice.  This is the name of an article I just read posted on Neil Garfield’s LivingLies blog.  The article is from Mark Stopa, an attorney in Florida.  Read this article first and then come back and read my comments below:

When I saw the title, I thought awesome, they will go back to the origination of the loan.  But they went back to the time the judicial foreclosure case was filed.  This is a good argument and it should be fairly straight forward, or at least as straight forward as anything can be in a legal proceeding.  What I was looking for was what I heard this last week from somebody.  They went to bankruptcy court and told the judge that they had evidence that their loan was table funded, which means the named lender did not provide the money to fund the loan.  The money to fund the loan came from an unknown and undisclosed third party.  The bankruptcy judge made a simple statement.  The judge said that if the named originator did not fund the loan, then they have nothing to transfer, and the movant in the motion for relief from stay (the bank) would therefore have nothing.  This judge understands that the note is only evidence of the obligation, it is not the actual obligation.  Transfer of the note or the security instrument (Mortgage, Deed of Trust, Security Deed or Mortgage Deed) without an interest in the obligation itself, is meaningless.  That is the type of standing issue that I would like to see attorneys make in all states.

Is this why under Regulation “Z” table funded loans have the presumption of being predatory?

Hundreds of Years of Title Destroyed in a Decade and a Half

Hundreds of Years of Title Destroyed in a Decade and a Half

By Daniel Edstrom
DTC Systems, Inc.

Neil F. Garfield, Esq. just posted the following article:


Posted on June 18, 2011 by Neil Garfield

What nearly everyone is missing is that any property that was mortgaged at any point in the last 15 years may have serious title defects.  Here is the scenario:

  1. A house is purchased or refinanced with a mortgage
  2. At some point in the future the house is refinanced again or sold
  3. A title company sends a payoff amount to “an entity”
  4. “An entity” issues either a substitution of trustee and full reconveyance or a full reconveyance (or other type of document used to release the loan)
  5. Repeat ad nauseum (or this only happened one time) Continue reading “Hundreds of Years of Title Destroyed in a Decade and a Half”

Cease and Desist Consent Order Issued Against DocX and LPS Default Solutions

Cease and Desist Consent Order Issued Against DocX and LPS Default Solutions

By Daniel Edstrom
DTC Systems, Inc.

These consent orders are coming out of the woodwork.  Here is an excerpt:

WHEREAS, in providing document execution services to Examined Servicers, including
services that facilitated completing foreclosures, LPS and its employees allegedly:

(a) Executed numerous affidavits and similar sworn statements (collectively,
“Affidavits”) making various assertions, such as the ownership of the mortgage note and
mortgage (or deed of trust), the amount of principal and interest due, and the fees and expenses
chargeable to the borrower, in which the affiant represented that the assertions in the Affidavit
were made based on personal knowledge or based on a review by the affiant of the relevant
books and records, when, in many cases, they were not based on such knowledge or review.
LPS executed these Affidavits on behalf of Examined Servicers knowing they would be filed in
state courts and in connection with bankruptcy proceedings in federal courts;

Continue reading “Cease and Desist Consent Order Issued Against DocX and LPS Default Solutions”

Wells Fargo Does It Again – This Time Investors Take a Hit

Wells Fargo Does It Again – This Time Investors Take a Hit

By Daniel Edstrom
DTC Systems, Inc.

Since Wells Fargo Bank has been around since the Gold Rush days and are such a large lender and securitizer, you would think that they would have state of the art systems handling the servicing of loans.  Especially in light of the huge rush to securitize anything and everything in the last 10 years.  But apparently the meltdown has moved them beyond what their systems are capable of.  This is probably especialy true given that banks are for the most part not lending much anymore (very limited number of new loans), but the number of loans in default, foreclosure, bankruptcy and REO status has skyrocketed. Pushing through so many foreclosures and processing so many advances and distributions is weighing down on their systems and infrastructure.  In their latest March statements to certificateholders (investors who purchased certificates from securitized trusts), Wells Fargo (usually as a Master Servicer or Servicer) is giving investors this disclosure on the first page of the reports:

 NOTE: Wells Fargo Bank, N.A. is processing an extraordinary expense charge related to the analysis, creation, and implementation of new and enhanced systems and processes necessitated by significant and unanticipated changes in industry and market conditions.

Continue reading “Wells Fargo Does It Again – This Time Investors Take a Hit”



April 30 to May 1, 2011 – in Phoenix, Arizona

Venue is to be determined



This is a two-day seminar on litigation and negotiation of residential loans that are claimed to be securitized.  Early registration is advised. Continue reading “LAWYERS CLE WORKSHOP ON FORECLOSURE DEFENSE AND OFFENSE”

Update on Foreclosures in Oregon

Update on Foreclosures in Oregon

David Ambrose
Ambrose Law Group, LLC

Here is the latest, which while limited to Oregon, certainly can be applicable to any other states permitting nonjudicial foreclosure actions but requiring the recording of assignments of the mortgage or trust deed. 

You may recall the postings about the decision of Judge Alley in U.S Bankruptcy Court in Oregon (McCoy v BNC Mortgage), finding that in to proceed with nonjudicial foreclosures in Oregon, the applicable statute requires that there be a chain of recorded assignments (which, by the way, in Oregon you cannot record a document unless it is notarized), from the original beneficiary to the current beneficiary, and that MERS is not the beneficiary.

Continue reading “Update on Foreclosures in Oregon”

MERS has no agency – New York Bankruptcy Court: in re Agard

The following is a New York Bankruptcy motion for relief from stay ruling from February 10th, 2011




In re:

Case No. 810-77338-reg


Chapter 7




Before the Court is a motion (the “Motion”) seeking relief from the automatic stay

pursuant to 11 U.S.C. § 362(d)(1) and (2), to foreclose on a secured interest in the Debtor’s real

property located in Westbury, New York (the “Property”). The movant is Select Portfolio

Servicing, Inc. (“Select Portfolio” or “Movant”), as servicer for U.S. Bank National Association,

as Trustee for First Franklin Mortgage Loan Trust 2006-FF12, Mortgage Pass-Through

Certificates, Series 2006-FF12 (“U.S. Bank”). The Debtor filed limited opposition to the Motion

contesting the Movant’s standing to seek relief from stay. The Debtor argues that the only

interest U.S. Bank holds in the underlying mortgage was received by way of an assignment from

the Mortgage Electronic Registration System a/k/a MERS, as a “nominee” for the original

lender. The Debtor’s argument raises a fundamental question as to whether MERS had the legal

authority to assign a valid and enforceable interest in the subject mortgage. Because U.S. Bank’s

rights can be no greater than the rights as transferred by its assignor – MERS – the Debtor argues

that the Movant, acting on behalf of U.S. Bank, has failed to establish that it holds an

enforceable right against the Property.1 The Movant’s initial response to the Debtor’s opposition was that

MERS’s authority to assign the mortgage to U.S. Bank is derived from the mortgage itself which

allegedly grants to MERS its status as both “nominee” of the mortgagee and “mortgagee of

record.” The Movant later supplemented its papers taking the position that U.S. Bank is a

creditor with standing to seek relief from stay by virtue of a judgment of foreclosure and sale

entered in its favor by the state court prior to the filing of the bankruptcy. The Movant argues

that the judgment of foreclosure is a final adjudication as to U.S. Bank’s status as a secured

creditor and therefore the Rooker-Feldman doctrine prohibits this Court from looking behind the

judgment and questioning whether U.S. Bank has proper standing before this Court by virtue of a

valid assignment of the mortgage from MERS.
Continue reading “MERS has no agency – New York Bankruptcy Court: in re Agard”