L. Randall Wray does it again – Requiem For MERS
By Daniel Edstrom
DTC Systems, Inc.
L. Randall Wray, Professor of Economics and Research Director for the Center for Full Employment and Price Stability, University of Missouri-Kansas City posted an article on the Huffington Post (http://www.huffingtonpost.com) that I somehow missed. The MERS design was woven in fraud. Professor Wray points out the two main issues with MERS. The first is that most foreclosures are illegal because those doing the foreclosing do not have legal standing. Second the practices that create the foreclosure problems also mean that the mortgage backed securities are actually unsecured debt. Professor Wray says that this means the banks must take them back, so they are toast. He also states that it all comes back to MERS business model: it destroyed the chain of title.
This goes along with my long standing contention that there is no obligation to the homeowner (the trust is solely obligated to the certificateholders), there is no right to enforce the lien (which doesn’t exist), and no default exists (these complex financial engineering transactions were excessively designed with credit enhancements and other features (such as, among other things, advances, insurance and credit default swaps). The advances and other credit enhancements paid the obligation so that no default exists. The payments have been made, plain and simple. This is not the homeowners obligation, but according to the governing documents, multiple parties are obligated pursuant to the note (See the section entitled “Obligations of Persons Under this Note”).
These are the banks obligations and they are shirking their responsibility and passing them off to the least sophisticated and least informed person around – the homeowner. If the homeowner had received a loan, the homeowner would be obligated. Instead the homeowner was told “this is a loan”, but then given a complex securities transaction that was a materially non-disclosed. The proof that this entire meltdown was a scheme and artifice to defraud is the very existence of MERS itself. The creation of MERS shows not just Mens Rea (a guilty mind; guilty knowledge or intention to commit a prohibited act), but scienter (an evil mind).
View Professor Wrays article on the Huffington Post here: http://www.huffingtonpost.com/l-randall-wray/requiem-for-mers-and-the-_b_812940.html