SC ATTORNEY GENERAL: “BROAD, ABSTRACT” DECISION DESIGNED TO PRESERVE “BROKEN” LAW
|| By FITSNEWS || S.C. attorney general Alan Wilson rebuked the U.S. Supreme Court’s shocking verdict on Obamacare – arguing the high court’s justices went way out on a limb in order to preserve U.S. president Barack Obama‘s disastrous social medicine law.
“Today, a majority of the U.S. Supreme Court interpreted the plain meaning of this law in the broadest and most abstract way possible in order to save a broken government-run healthcare system,” Wilson said.
Indeed they did … again. As we noted in our original coverage of this deplorable ruling, the court “ignored the clear language – and explicit intent of Obamacare.”
Wilson agreed, siding with dissenting justice Antonin Scalia, who wrote that the court’s decision in Halbig v. Burwell “changes the usual rules of statutory interpretation for the sake of the Affordable Care Act.”
It does … dramatically. And dangerously.
While criticizing the court’s ruling, Wilson cautioned that the case has never been about the debate over the efficacy of socialized medicine.
“This case has never been solely about the merits of providing healthcare to the American people, but more about the unconstitutional way the Affordable Care Act was written and implemented,” Wilson added.
That’s true. Obamacare is a disaster, but that’s not what this case was about. This case was about the rule of law: And whether the court would uphold it or ignore it.
They chose the latter … and as a result, thirty-six states will continue being subjected to what amounts to the greatest instance of taxation without representation in American history.
Where does old Alan stand on removing the Flag. Haven’t heard from his ass yet.
He wants it moved. He released a statement on Tuesday about it.
Rail! Rail! George III. Poor people now have access to health care. You coulda done it your own bad selves first… Wrong side of history.
Does that mean he is going to drop his ultra low-cost Gov’t Health Care plan, since he is soooo against it all?
As someone who has served bravely in the military for 18 years, he is entitled to Tricare. What have you down for your country?
I put with people like you each and every day. And, BTW, your medal is on its way.
You are correct, he is entitled to universal gov’t run healthcare just like every other citizen of this country. Why only old people and veterans are makes no sense to me.
Actually if he has only served 18 years he ain’t entitled to jack – yet.
Remember the early retirements, boss?
Early retirements don’t normally apply to National Guardsmen and I checked he still serving.
Sorry–skipped the groove momentarily
Not so. He is entitled to Tricare Reserve Select–much better than Tricare Prime or Standard (in my opinion).
True but we were really talking about retirement benefits. I’ve used TRICARE Reserve, I agree, best deal in town.
You should know asshole. You are supremo in milking the system. Guys like you makes us throw up.
Who are you, Gollum, “…makes us throw up…”? Or maybe you’re referring to the voices in your head?
Yeah, I’ve “milked the system”, sure I have…
Welcome to the 21st century and this is the beginning of a re strengthening of the state in the US. Changes are coming and real fast – the American way of life needs to adapt with respect to higher education (more funding), demilitarization and sound pixies for the environment – all needs higher tax brackets and we will have those in the next 3 years.
“Sound Pixies” ?!?!
Ooh ooh!! I want my sound pixies!
“sound pixies” — will they look like Tinkerbelle? Will there be one in every home ?
I received an anonymous phone call on my landline from some teenage girl with a squeaky voice who corrected me: it is” Tinker Bell…. Actually I believe she is my friend who works in the Governors Office…
once you know what the question actually is, you’ll know what the answer means
Wireless ear buds controlled by thought patterns to select content from the free wireless internet… sometimes used with wireless, video capable interocular lenses. – Hitchhiker’s guide to the Galaxy.
Ah, I never bothered to read that one. Guess I’ll have to now. ..
Don’t read it to find that definition.
I made it up.
Ahh, you mean “sound policies” like basing judicial review on what you wish the law had said rather than the actual wording of the law?
You want the guys who just allowed all of the human resource records of every employee working for the gubamint to be setting policy on anything?
Conservatives think they run the show. Not so !
This is a victory for the people. Very happy with the Supreme Court right now.
That’s the essence of the difference between Democrats and Republicans: Democrats understand that government is about human beings, not rigid, pathological ideology.
Speaking of humans, what do you think about my new Northwest United States flag? (America is the continent’s slave name)
To much green in it – I’m offended by verdians.
Doesn’t adequately honor the sacrifices made by Quakers. Also missing the Lenai Lanape indians of New Jersey. But getting close.
I forgot the Lenai Lanape Indians, but they should be included in the teepee indian flag part.
WTF? Slave name?
These continents were named after Amerigo Vespucci- a conquistador helping racist conqueror. Obviously naming them after this guy, instead of a native name or a geographic name, is akin to forcing Kunta Kente change his name to Toby. Come on. Everyone knows this.
If Scalia were a 15 year old boy, you could call him immature, juvenile and ADHD.
But, when they throw fit after fit when they’re 79, it must be dementia.
And, he lies, too. But, I bet ole Joe won’t scream “You Lie!” at this Opus Dei freak.
Oh, dear AG, please tell us the real reason why rich people don’t want poor people to have health care?
I looked at the draft which said [email protected]
That’s profound. Thanks for bringing so much to the dialogue.
Okay, fuck him twice!
Fuck him thrice!
Families USA showed that if the US supreme court had ruled any differently on this case than they have in the past when the Congress has made an obvious typo, that 19,000 people/human beings/citizens in Joe’s district (154,000 statewide) would have lost their health care tax credits which enabled them to afford health insurance.
Now, does he care?
Freakin’ no!!!!!! Dez black people anyway.
How is his lawsuit against marriage equality going? The same way, I’ll betcha!
Gay marriage bans, now those are constitutional! Government can’t regulate health care but it sure can regulate who you can and can’t marry!
Buck tooth Alan needs to shove it!
What was unconstitutional about the way the ACA was passed, Alan? It was passed in the House and Senate before it was signed into law by the President. Please tell us, Alan Wilson, how you think laws are made.
I’m just a bill, up on Capital Hill………
Ain’t a bill no mo, it is the LAW!
I’m predicting that the gay marriage decision will come tomorrow.
I still say this guy looks like a used car salesman.
Yeah, it’s much better to let people go without a safety net of health care. It’s the American, or is it the Republican way. Once it was “we’re all in this together”. Now it’s, “Everyone, you’re on your own” Oh well, at least SC can still take pride in the fact that we let people suffer needlessly because, well, being righteous about our ideology is more important that being right. Remarkable that I was able to write that without writing “You lie!!” Anyway, thanks Alan. Consider your Republican butt now officially covered
That’s the way we done it in the confederacy. Its an issue of heritage.
Daddys little boy and his bald spot trying to get some press…..
Fuck you, Wilson! Fuck you!
One of the simple canons of statutory interpretation is that a court will reject a statutory interpretation that leads to a result so plainly absurd that it could not have been intended by the legislature or would defeat the plain legislative intent. Six thought the result would be absurd, 3 did not. Amongst lawyers I talked to before this opinion ever came out thought the result was going to be in favor of the ACA as the result otherwise was going to be absurd. This is not a shock to anyone who knows the law.
He’s better than most attorneys….he took the bar TWICE – “YOU LIE” – nope, its true…..now you know the REST of the story……
Voters are rejecting Democrats in record numbers. But the SCOTUS is propping up bad liberal law based on a whim. It’s truly a sad day in America.
It isn’t unconstitutional and SCOTUS ain’t killing the bill over Republican crying over four words in a reform hundreds of pages long. Cry us a river!
If you are not just one of those fully 100% ‘slopping at the taxpayer trough” folks, how much is the deductible on say a medium size family Obama gov. care plan?
Depends on several variables, such as your county and state, the level of coverage you want, and which company you want to go with. I looked at plans in Nashville, TN because that’s where we’re moving next month, and a Silver plan for family can be as low as about $450/month.
Thanks, but when you visit a doctor how much do you pay? Some ins companies cover 80% and the other 20% is yours upfront. I know with Medicaid it’s all free/100%.
Depends, there are four categories with different deductibles and all that jazz.
The plans I was looking at were 80/20.
Boo Hoo, GOPgoober.
All over America Republicans slipped off into closets to breathe an audible sigh of relief with the Supreme Court’s approval of continued Obamacare subsidies. They didn’t want to enter campaign season facing millions of irate Americans who has lost their healthcare insurance, having no plan of their own and having to forfeit the anti- Obamacare screeds to which Fox News and Rush are dedicated. The GOP needs to enter the 2016 race committed to a continued attack on Obamacare. It’s done so much for them so far in national races.
After it was passed they read it. That’s Obama’s legacy.
Five years and 51 tweeks later, I discover that I didn’t know what “States” mean, and it’s not just Congress that can pass laws.
Thank you, oh enlightened ones.
This guy, and the GOP Aholes in Congress need to come up with a New Lie. When they say Repeal and Replace, what I hear is Uncontrolled Flatulence. They have No alternative for Replacement. It would be too much like Actual Work to come up with a viable alternative. Go suck the Battle Flag, Aholes!
Alan does not like that the ACA is constitutional, that is decided by the supreme court, who decides that because the Constitution says they do. So really he and other Republicans hate the Constitution, the judicial branch, and the system of checks and balances our founding fathers designed. Un-American cry baby!
Beaufort County, SC. Sues MERS for Fraud, Filing False Mortgage Documents
Neighboring counties join Beaufort County in suing mortgage-services company
July 4, 2014
The other counties in the South Carolina’s 14th Judicial Circuit are following Beaufort County’s lead by filing lawsuits against a nationwide mortgage database (MERS) Mortgage Electronic Registration System, according to an attorney for those counties. Other Defendants that the Counties are suing include CitiMortgage, Deutsche Bank, JP Morgan Chase, Bank of America, Mortgage Network, HSBC Bank, SCB&T, Coastal States Bank, and Tidelands Bank.
Beaufort, Allendale, Colleton, Hampton and Jasper counties say Mortgage Electronic Registration Systems (MERS), owned by nearly two dozen large banks and mortgage services, operates an electronic record-keeping system that parallels the counties’ deed records.
The counties contend the system hides who owns loans, often by listing only MERS as the owner, not a specific member bank or servicer. That constitutes fraud and undermines the county’s property-ownership records, which state law requires to list the exact owner of a property’s title, county attorney Josh Gruber said.
In extreme circumstances, that could mean homeowners are left in the dark about who owns their loans and would have no public records to turn to try to defend their homes against foreclosure, Gruber said.
“You’re talking about anticipating the worst-case scenario,” he said. “Your mortgage company is entitled to foreclose on the loan (if its agreement isn’t met), and if you don’t know who has that, you could find yourself in big trouble.”
The company also could have sidestepped several hundred thousand dollars in local Register of Deeds’ filing fees for recording transactions on deeds. Lawsuits against MERS to recoup those fees have failed in other states, so the 14th Judicial Circuit counties have avoided that claim, Gruber said.
Instead, the counties contend the MERS system has caused their register offices to break state law by not accurately updating deeds to reflect which specific servicer or bank owns a lien, according to Bluffton attorney Jim Scheider of Vaux & Marscher, who helped write all five lawsuits.
The counties seek unspecified compensatory and punitive damages, along with a court order for MERS to correct any inaccurate records. Vaux & Marscher will be paid only if MERS or other defendants are required to pay damages.
In Beaufort County, Scheider and county officials say, more than 50,000 mortgages have MERS on record.
The system instead has cracks that could leave people in extreme circumstances out of the loop on their mortgage. If their new bill is delivered to the wrong address or they’re sick in a hospital and miss a payment, they cannot use public records to find who they are in debt to, Gruber said. However unlikely, the counties want to plug those recording holes, he added.
“When you’re dealing with somebody’s home, which is usually the biggest investment anyone will make in their life, you don’t want to take any chances with that,” Gruber said.
Last month, the defendants attempted to move the case to federal court, but U.S. District Judge Sol Blatt Jr. of Charleston ruled the case should stay in the state courts, Scheider said.
Now the state’s business court will consider the defendants’ request to hear the case there later this year. Scheider said he has not decided whether to challenge that request or argue to keep the case in the 14th Circuit.
“Wherever we end up, we’re still entitled to a jury trial in the individual counties, and we want this to be heard by a group of borrowers,” Scheider said.
Beaufort County sues document-registry firm
June 12, 2013
Beaufort County has filed a lawsuit against Mortgage Electronic Registration Systems (MERS), a nationwide mortgage database that is owned by nearly two-dozen large banks and mortgage services.
County officials say the company’s records do not always accurately reflect a loan’s owner.
The company also does not consistently alert the county Register of Deeds Office when loans on properties are bought, sold or bundled into a tradable security. Instead, the record indicates only that MERS owns the note, county attorney Josh Gruber said.
“These activities have caused massive confusion and has made many of the Beaufort County Register of Deeds recording systems inaccurate and unreliable,” Gruber said in a statement.
The case was filed in the Beaufort County Court of Common Pleas by the Bluffton firm of Vaux & Marscher, which is representing the county. Vaux & Marscher will be paid only if MERS or other defendants are required to pay damages.
The other defendants include Bank of America, J.P. Morgan Chase and HSBC Mortgage Corp. Local banks that are MERS members and named in the lawsuit are S.C. Bank and Trust, Coastal States Bank and Tidelands Bank.
The county wants MERS and its members to correct the public records to accurately reflect who owns mortgages on local properties. If that’s not possible, the county seeks “compensatory, consequential and punitive damages for the destruction and harm caused to the Beaufort County Recording System.”Beaufort County is the first county in South Carolina to sue MERS and its member banks. Although similar lawsuits against MERS have failed, Gruber says the county has taken a novel approach by targeting what it claims are inaccuracies in the public record.
“MERS has recorded documents in our system that basically show them as being listed as the mortgage holder when in fact they are not,” he said.
The county believes this is a problem for several reasons. One is that the county is required under state law to keep accurate property records that include the mortgage holder. Another is that the current records obscure true ownership and mortgage information on local properties.
“At the end of day,” Gruber said, “a Beaufort County citizen cannot walk into the Register of Deeds Office and know without a shadow of doubt who owns or services their mortgage.”
Beaufort County lawsuit against mortgage registry moves ahead
May 29, 2015
A lawsuit filed by Beaufort County and four other counties against a nationwide mortgage database MERS can proceed, a judge has ruled.
The counties are suing Mortgage Electronic Registration Systems (“MERS”) and its member banks, alleging the system hides who owns loans. That constitutes fraud and undermines the county’s property-ownership records, which state law requires to list the exact owner of a property’s title, county attorney Josh Gruber has said.
The counties are represented by the Bluffton law firm of Vaux, Marscher & Berglind PA.
MERS had filed to dismiss the suit, but Judge R. Lawton McIntosh of the S.C. Business Court has DENIED the request.
Other Defendants that the Counties are suing include CitiMortgage, Deutsche Bank, JP Morgan Chase, Bank of America, Mortgage Network, HSBC Bank, SCB&T, Coastal States Bank, and Tidelands Bank.
Pre-trial ruling favors the plaintiffs Allendale, Beaufort, Colleton, Hampton and Jasper Counties
May 29, 2015
A 10th circuit judge has issued a pre-trial ruling in a civil case brought on behalf of five low state counties. The counties of Allendale, Beaufort, Colleton, Hampton and Jasper are alleging that the national electronic registry MERS and its member banks have corrupted a traditional land records system and replaced it with a controversial electronic data registry.
Based on a recent hearing in Oconee County, Judge Lawton McIntosh denied the request by MERS and the banks to dismiss all claims made by the counties. McIntosh’s ruling is seen as an initial ruling that keeps the case alive and clears a hurdle on the way to trial.
One of the plaintiffs by name is Dale Butts, the Beaufort registrar of deeds who earlier held the same position in Oconee County. Oconee is not one of the plaintiffs, but Westminster businessman John Dalen has urged Oconee County Council to take an interest in the case because one of the potential outcomes could mean money for the county’s coffers.
According to a Beaufort law firm representing the plaintiffs, the counties also allege that MERS and the banks “have been and continue to file fraudulent and inaccurate documents in an attempt to push through home foreclosures and to deal with chain of title issues.”
MERS HAS MORE TO WORRY ABOUT THAN JUST LAWSUITS!
The following lawsuit, filed by Beaufort County, South Carolina has apparently become another hemorrhoid on the rectum of MERSCORP Holdings, Inc.(MERS can’t get hemorrhoids, as that corporate shell is empty and devoid of the B.S. that spews from MERSCORP’s PR Department on a regular basis. Even a heavy dose of Prep H didn’t stop Judge R. Lawton McIntosh of the South Carolina Business Court from allowing the following Verified Amended Complaint against MERSCORP to proceed:
MERS has no members. MERS would like you to think it has members, because this is part of the deception game MERS’s counsel utilizes to confuse the courts. The member-users of the MERS® System actually have a contract with MERSCORP Holdings, Inc. because the bunch of lenders that are involved in this litigation entered into contractual relationships with MERSCORP.
Absent the Warehouse Lender Agreement, undisclosed to the Borrowers of MERS-originated Mortgages and Deeds of Trust is that MERSCORP Holdings, Inc. is the “Electronic Agent” for the alleged Lender (who is really the Borrower here). I know this sounds confusing, but once you read this form (below), you will see how the nexus is created that involves securitization on Wall Street and exactly WHY the Borrowers are actually parties to the assignments and transactions that take place within the REMICs:
I wonder if the County Attorney knows about this document? Maybe he should.
I find it fascinating that Paragraph 65 on Page 21 of the Complaint specifically cites that none of the Mortgage loans actually made the REMIC trust pools. Paragraph 65 also asserts the alleged methodology by which MERSCORP (through its MERS® System users) gets $10 an hour employees (average pay for an Assistant Secretary or Assistant Vice President, wouldn’t you agree?) to sign as MERS “officers” when these people know damned well they’re not! The last sentence of Paragraph 65 claims that MERS disavows any beneficial interest in the mortgage, but I have seen documents in my review of chains of title and court documents that show that BOTH THE NOTE AND DEED OF TRUST (in a Texas case) WERE TRANSFERRED DIRECTLY TO MERS! No other lender or investor was mentioned in the Assignment! This is where we really need to pay attention, because the MERS® System (besides obfuscating the real parties in interest) business model is maintained by the users of the system (the contracted parties with MERSCORP) who input whatever suits their fancy at the time.
The real problem occurs when these alleged “assignments” are recorded in the real property records. Many states have laws involving fraudulent document recordations and provide criminal penalties for such. Many states provide restitution for the victims as well as criminal prison terms for the offenders (Florida). Texas has Texas Civil Practice and Remedies Code 12.002. It provides for $10,000 fines and attorney’s fees (and possibly more in the criminal realm) for recording documents known to contain false information when in recorded form, are relied upon by foreclosure mill law firms (many of which participate in the manufacture of the documents themselves) who rely on these documents in litigation (which if found to be fraudulent would constitute perjury).
Paragraph 79 of the Complaint asks the Court to pierce the “corporate veil” of MERSCORP and MERS. That would mean that Billy Boy and all of his compadres would be in the “hot seat” civilly. But wait, let’s talk about the criminal implications here … the Osceola County Real Property Records Forensic Examination has a whole section on MERSCORP included in it, alleging HOW the MERS® System acts as a “vehicle”, or mechanism by which criminal RICO-style behavior exists among MERSCORP members who use the MERS® System. So, it could be logically maintained that the MERS® System becomes part of a larger criminal conspiracy among the shareholders of MERSCORP, as well as the perps who use MERS’s name on documents they robo-sign, to create the recorded impression that MERS has some sort of authority, when in fact, all of this alleged authority is invented to fool the judge into believing that whoever relies on these so-called “assignments”, gets what they want (which is usually the property). It doesn’t take rocket science to put the pieces together to see the bigger picture here. In fact, the report mentioned herein goes into specific detail about how MERS and MERSCORP are criminally implicated in the “bigger picture”, because the MERS® System facilitates the fraudulent behavior while turning a blind eye to the activities of its “membership”.
The icing on the cake is the County Attorney asking for compensatory damages against MERS, MERSCORP and its members for wreaking havoc on the county’s statutorily-mandated recording system. Trust me, you’d have to quiet title to every single piece of property that MERS is shown on in order to “fix” these issues. This is something that Montgomery County’s Nancy Becker appears to be headed towards in her quest to kick MERS and its parent out of Pennsylvania.
It would only stand to reason that once Beaufort County actually takes a full-scale examination of their records into account, more of this insidious behavior will come to light. This is why there should be more county land record audits and forensic examinations conducted in the United States.
The rest of the story in South Carolina remains to be seen. But for now, Beaufort County needs all of the help and support from the public that it can get! This case certainly has my seal of approval! Meanwhile, all in Osceola County, Florida remains quiet pending the outcome of whatever “alleged investigation” is ongoing there.
Pennsylvania Clerks Take on MERS
April 14, 2015
Two class action lawsuits are winding their way through the courts in Pennsylvania. Both involve county clerks as plaintiffs, and Mortgage Electronic Registration Systems Inc., or MERS, either as a defendant or a participant in allegedly fraudulent practices. They both point to larger problems within the residential mortgage sector.
Having suffered through the subprime mortgage meltdown of 2008, the robo-signing misadventures that led five major banks to enter into a $25 billion settlement agreement with 49 states’ attorneys general, and after a decade of devaluation in the housing market, you would think the financial market had learned its lesson, that government reforms had been effective and that the mortgage financial market and its investors would have been restored to a secure foundation. But these cases indicate otherwise, bringing to light systemic problems that could exacerbate another market disruption, the tip of a burgeoning iceberg threatening havoc against the nation’s homeowners and investment markets worldwide.
MERS began in the early 1990s when an interagency task force, formed by the Mortgage Bankers Association, Fannie Mae, Freddie Mac and Ginnie Mae, recommended an industry-sponsored central repository to register and track the ownership of mortgage interests. MERS was officially launched in 1997. The concept was straightforward: residential mortgages would be issued a unique mortgage identification number that MERS would record in its database and track. As a mortgage loan moved between trading partners, beginning with the originating lender, the securitizer (Fannie, Freddie), then on to secondary-market investors, since each party typically assigned its own account number to the asset, the use of a centrally assigned identification number facilitated standardized tracking throughout the process.
But the mortgage industry had envisioned another application for MERS, unarticulated at the time, that would reap billions of dollars in profits by eliminating the practice of filing mortgage transfer documents at local courthouses.
Under MERS, mortgages would continue to be recorded locally, but the records of any subsequent transfers of mortgage interests would be maintained within the MERS registry, rather than at the local courthouse.
The practice of tracking loan transfers internally within MERS, to escape the costs of county clerks’ fees, is the crux of one of the Pennsylvania cases, Montgomery County v. Merscorp, Civil Action No. 11-6968, U.S. District Court, E.D.Pa.
The plaintiff alleges that by not recording mortgage assignments, MERS had made “negligent and/or willful violation” of recording statutes, and in doing so had received “unjust enrichment,” through avoidance of recording fees. Additionally, the plaintiff has asked for a declaratory judgment and permanent injunction requiring MERS to record all mortgage assignments in the future and to record all previously unrecorded assignments, and pay the recording fees. That order would potentially incorporate all 67 Pennsylvania county recorders.
Should the plaintiffs win, hundreds of thousands of assignments could be disgorged from MERS and submitted for recording across Pennsylvania.
Washington County v. U.S. Bank, Civil Action No. 2011-7095, Washington County C.P., has a similar genesis, raising objection to the mortgage industry’s reliance on MERS’s internal tracking instead of duly recording assignments in county offices. But the case takes a sharp turn in its claims about the ramifications of nonrecording. The county’s allegations seeks to draw back the curtain on the mortgage securitization process, directing the court’s attention toward the inner workings of the investment substrate.
Originating lenders rely on the secondary market to sell off existing loans and free up funding for new originations. Both the note and the mortgage are transferred to the purchaser of the loan. Those purchasers then seek to package mortgage loans into investment vehicles through the securitization process.
Under the MERS system, the illustrated transfers are tracked in its registry and are not transferred by mortgage assignments in the local land records.
In the Washington County case, the plaintiffs argue that all transfers from originators to sponsors, sponsors to depositors, and from depositors to trusts, must be recorded in the local land records as a matter of law. Washington County further argues that unrecorded assignments “shall be adjudged fraudulent and void” as to any subsequent purchaser or mortgage holder, citing case law from 1834. Washington County further argues that the mortgage-backed securities, created under RMBS and REMIC guidelines, are invalid because the existence of unrecorded assignments violates the terms of the pooling and service agreement, which governs the sponsor-depositor-trust relationship.
The pooling and service agreement stipulates all rights to the mortgages within the pool be transferred to the trust, free and clear of any encumbrance, within 45 days of closing the security trade. Washington County argues that in order for it to be valid under Pennsylvania law, a mortgage assignment must be made in writing and filed with a county recorder. Since mortgages are being recorded with MERS as mortgagee, and no written assignments are being recorded, irrespective of the intent under the pooling process, from a legal perspective the mortgages are not held by the RMBS trust, but remain titled to MERS, as mortgagee.
The Washington County case discusses the two-document structure of the note and mortgage that constitutes the basis for mortgage-backed securities. In the securitization process, between the originator, through to the sponsor, depositor and trustee, at each step along the way, the notes are endorsed as the pooled loans are sold, with the mortgages to be conveyed along with them. A typical RMBS securitization requires at minimum four transfers, each involving the note and the mortgage. MERS only involves itself with the mortgage document, with the mortgage note being handled separately between trading partners, completely outside of the MERS system. Under the MERS system, the mortgage remains in the name of MERS throughout the life of the loan, until the loan is repaid or, in the event of default, is foreclosed.
Attorneys arguing for Washington County construe this practice as a violation of the Pennsylvania Rules of Civil Procedure, which require the party bringing prosecution to be a real party of interest. The “real interest” in a debt collection proceeding resides with the party entitled to repayment of the debt, which in a mortgage foreclosure is the note holder, since the note is the debt obligation. While the debt obligation (the note) is transferred to others, one of the counts brought by Washington County asks the court to issue a judgment declaring the notes held by RMBS trusts, originated in the name of MERS, be reclassified as unsecured debt. Unsecured debt status, similar to credit card debt, would be antithetical to the stability and security investors seek when purchasing shares in an RMBS, making it instead more akin to a junk bond investment.
Yet to many observers, the financial practices in question amount to a hollowing out of centuries of tradition in private property rights and common law, both foundational to American liberty and the rule of law. In the age of “too big to fail,” perhaps these Pennsylvania clerks, confronting a financial house of cards, give voice to a new refrain: too weak to stand.