Saturday, October 23, 2010
Lawsuit Alleges that MERS Owes California a Potential $60-120 Billion in Unpaid Land-Recording Fees
Former hedge fund manager Shah Gilani notes:
In creating MERS, these institutions actually changed the land-title system that this country - for much of its history - has relied upon to determine legal ownership status of land titleholders.MERS is a shell company, with no employees. However, its parent does have employees.
Not only did the lenders sidestep (read that to mean avoid) paying billions of dollars in fees to local governments, they paid themselves from the fees that MERS collected.
MERS is facing class-action lawsuits and civil racketeering suits around the country and their members are being individually named in all these suits. One suit alleges that MERS owes California a potential $60 billion to $120 billion in unpaid land-recording fees.
If suits against MERS and all its members are successful, unpaid recording fees and fines (that can be as much as $10,000 per incident) would make every one of them insolvent.
As Bloomberg notes:
MERS Inc., which holds the liens, has no employees, and MERSCORP, the parent, has only about 50, [the MERS spokeswoman said].Plaintiffs' lawyers will undoubtedly argue that the "corporate veil should be pierced". In other words, they'll argue that MERS hasn't followed normal corporate formalities (or is inadequately capitalized), and so the big banks which own it should have to pay any judgments against it. I am not sure who will win that argument.
But Plaintiffs' lawyers will probably also name the banks themselves directly as co-defendants.
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Did the Governator finally found how to save California from the budget slump?
ReplyDeleteReally everybody should be smelling blood in this massive legal fraud and banks actually owe now A LOT of money they thought they owned, another thing is when it will be paid if ever but they just have lost access to a zillion of assets: mortgages and even their monthly payments. There's too many people, small and big, who have a lot to win from applying the law.
More interesting will be to see how these fraudster financial institutions fall or are saved with public money. Whatever the case the second part of the financial crisis is served and I doubt stocks won't react this week. They should plummet in fact.
So that's just California. How much money are we talking if ALL the states want their recording fees back, with penalties? And would it be enough to actually run the governments of these counties, put back what's been taken from normal operating expenses, etc? The whole freekin' country is broke, and Lord Bankfiend (tm) and his gang of thieves are planning their getaway with OUR money.
ReplyDeleteIt would help Calif. but I'm sure the feds will pay for it with taxpayers money. Just another bail out for the criminals of ws.
ReplyDeleteThis is what happens when we abandon the rule of law. The problem with finance and politics is it attracts exactly the people who should not be there
ReplyDeleteIts about time
ReplyDeleteHere's how the banks and MERS created a private secret recording system.
ReplyDeleteBefore "securitization" every lien against a piece of property had to identify the creditor who held the note or indebtedness. One could look at the deed records and determine who the creditor was by looking at the lien. So one could be sure who to pay off to secure clear title. "Securitization" changed all of that by making the lienholder a strawman, called MERS.
No matter how many times the notes are sold, MERS remains the lienholder. There are no filing fees to record the assignment of the lien when the note is sold because the lein is never assigned.
Clever. Except that courts don't like the private, secretive deed recording system that "securitization" has produced and are flat out rejecting it.
Crazy enough, they do offer a 'Career' menu-item on their website including all the benefits for staff. But he: no jobs being offered however!
ReplyDeletehttp://www.mersinc.org/career/index.aspx
This is only the tip of the iceberg as far as states trying to recoup their deprived recording fees. I don't think the $60B amount is correct though. That would add up to ~$3k - $5k in fees per loan. There were 60 mil loans securitized in the US. If you're interested, look at http://www.loanmodificationusa.com/mers-loan-reduction/ to learn about MERS. The banks are going to regret this!
ReplyDeleteTake a look at this I hope this helps people this is a step in the right direction
ReplyDeletehttp://www.msnbc.msn.com/id/40965934/ns/business-real_estate