Hah! For once, a light at the end of the tunnel that isn’t an oncoming train.

MERS is another financial industry rip off. Let’s hope Massachusetts Attorney General Martha Coakley doesn’t handle this like she did her senate campaign.

I swear I read somewhere that California was already suing MERS or some individual bank for billions in fees and penalties for failing to record transfers of notes.

I’ll search for the link.

Here it is:

Mortgagegate

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.

Hmmm … so MERS owes billions to the state … MERS gets it (how?) from the banks … the banks pay billions, but are now in trouble … they get billions from the Fed.

Yup. I see that works just fine.

Heh. The deed recorder in South Essex, MA? GO South Essex!

This story reminds me of the Grisham novel which was made into a movie starring Tom Cruise. At the end he has records showing The Firm had violations out the wazoo and they were all in a neat little stack sitting on one table. The FBI was miffed they didn’t get any big arrests until he told them how much the stack of violations would add up to in dollars and jail time.

Yes, I remember it well. Great scene. Wish it weren’t a novel.

It sure is a relief to have some good news for a change.

Recording isn’t compulsory, so I don’t see how there’s any reasonable case to be made that there are fees due.

I hate to say it, Carney is right, there will be a whitewash bill passed and signed by Obama. Does anyone here really think that there are enough progressives in Congress to stop it? Obama will will use his standard BS line of his, that we have to look forward, not backwards.

But the FEDs get it from the taxpayers… and the states…

It’s a vortex of insanity!

They sure didn’t say it wasn’t compulsory when I signed refinancing papers this morning.

Good news, in just over a month all my JPM Chase accounts will be closed and I’m moving over to a credit union.

That’s a contractual matter between you and the bank. It doesn’t have magical powers to bind the bank to record w/ the county rather than through MERS.

California Court Rules: MERS Can’t Foreclose, Citibank Can’t Collect

> It’s a vortex of insanity!

And that’s not good, because, literally, insanity is a virus.

I used to live in Essex county. Wish my brother in-law was still alive he would have loved to get his hands on something like this…

Woo-Hoo! More good news for sure. Some states charge from 7 to 14 cents per page for recording fees. Also, the recorder or paralegal that records is to be paid for their time and service in doing so. Mers is not only skipping the county and state recording fees, they are skipping the legal fees to have it done properly.

Not true in MA:

Registration of title occurs when the Land Court, after having the title exhaustively searched by a Court-appointed examiner, and after due process is afforded to all interested parties, reviews and then adjudicates and decrees the state of the title. Thereafter the current state of the title, as it is sequentially updated by registration of future transactions, is embodied in a certificate of title which not only evidences title, but, like the ship title of Robert Torrens’s focus, is in fact the guarantee of title, subject only to the exceptions provided by statute and matters of federal law. The initial decree of registration and the subsequent certificate of title are in rem, that is, against the whole world. A title, which according to the evidence of documents in the traditional recording system may be insufficient to support a conclusion of ownership, or which is clearly defective, may, through the adjudicatory process of registration, be made good and marketable.

In fact, the Real Property Act of 1858 was specifically to take the recording process out of private realm and to the Commonwealth.

You can MERS whitewash all you like, but the facts will never support you.

It does so by permitting good faith buyers from being able to buy a property free of the unrecorded security interest. (which is what your quote says if you bothered – or were able – to read it)

Again: there’s no requirement that a party record. If they don’t, they risk a good faith buyer from eliminating their interest. That’s it.

What a phenomenal article. Thank you. I never would’ve found that otherwise.

Never heard of insanity (schizophernia specifically) being explored in this light.

Great find. Thanks.

It is compulsory. Property and Title have to be recorded otherwise anybody could walk into your home and claim ownership.

Massachusetts happens to have extremely precise recording laws, and thus this is the best place to start this new front in the war on the corrupt banks.

God bless the Commonwealth of Massachusetts. Transfers of property have to be recorded. Now was that so hard?

What about New York?

AP IMPACT: Bypassing county fees may cost banks

(AP) – Nov 10, 2010

A few county recorders did take bold stands. In one prominent case, Edward Romaine, then the recorder of deeds for New York’s Suffolk County, refused to accept MERS recordings. He argued that not only would the county lose out on fees — $1 million in one year alone — but that MERS failed to even maintain a clear chain of title on a property. He got backing from New York’s attorney general.

MERS sued Suffolk County in 2001. The suit went all the way to New York’s highest court, where MERS won on appeal. The court found that a county clerk lacks the authority to refuse to record MERS transactions.

Really!! MERS is just a scam to sell these crazy bundled pieces of unsecured financial products?? The investors should be up in arms, they will take a major haircut when the states assert their property laws!

From August, by Ellen Brown, picked up everywhere:

Homeowners’ Rebellion: Could 62 Million Homes Be Foreclosure-Proof?

Local governments deprived of filing fees may also be getting into the act, at least through representatives suing on their behalf. Qui tam actions allow for a private party or “whistle blower” to bring suit on behalf of the government for a past or present fraud on it. In State of California ex rel. Barrett R. Bates (PDF), filed May 10, 2010, the plaintiff qui tam sued on behalf of a long list of local governments in California against MERS and a number of lenders, including Bank of America, JPMorgan Chase and Wells Fargo, for “wrongfully bypass[ing] the counties’ recording requirements; divest[ing] the borrowers of the right to know who owned the promissory note . . .; and record[ing] false documents to initiate and pursue non-judicial foreclosures, and to otherwise decrease or avoid payment of fees to the Counties and the Cities where the real estate is located.” The complaint notes that “MERS claims to have ‘saved’ at least $2.4 billion dollars in recording costs,” meaning it has helped avoid billions of dollars in fees otherwise accruing to local governments. The plaintiff sues for treble damages for all recording fees not paid during the past ten years, and for civil penalties of between $5,000 and $10,000 for each unpaid or underpaid recording fee and each false document recorded during that period, potentially a hefty sum. Similar suits have been filed by the same plaintiff qui tam in Nevada and Tennessee.

Show me the law that makes it compulsory, then.

“they’ll follow you to the gates of Hell…”

…headed outward, presumably.

Boy, am I epu’d, having been wandering about (purposefully) in the Mass. Real Property statutes and case law, etc. I’m afraid the conclusion has to be that registration or recording of transfers of title is not statutorily required.
Ch. 185 sec. 1 comes closest, and is the current embodiment of the law referred to in Kelly’s excerpt from the History of the Land Court, but it merely describes jurisdiction. Nor does the excerpt show that recordation is required.
As jpe said, though his expression of it was very unclear, the reason you record is to prevent breaks in the chain of title, which can cloud your own title when you purchase real property. But I can’t find any law requiring recordation. Recording is “required” by the consequences of *not* recording.

That’s pretty much how common law has worked for centuries, and real property law is some of the most ancient. Of course, that’s one reason MERS’s purporting to simply overturn those centuries of settled law is so absurd.
Real property law is tangled and confusing; that’s why it’s a good idea to have an experienced real estate lawyer when you buy a house, though people have come to discount that idea. Might have saved a lot of trouble if more people had run their contracts and notes and mortgages past a lawyer working for them.

The law you cite deals with registered property. This is an alternate system that sees little use. Recording is not compulsory, unless you want to make sure your secured interest is protected. The risk for the banks here is that it is not. They are free to take such chances if they are willing to take the risk.

Of course, if the banks want to go back and have their interests properly secured under state law, they are going to have to record the various transactions and pay the recording fees. I don’t see how a federal whitewashing bill can override the taxes owed to the states, but there may be a legitimate way to do this.

There was a country clerk in Suffolk New York by the name of Romaine who brought suit against MERS in 2001 for bypassing recording fees. Too bad he did not prevail, the NY Appeals Court ruled against him. I think the case in in scribd, I recall reading it. Extremely interesting is the comments of 2 judges in the decision , where one of them predicted practically everything that has happened, including that MERS could become the tool of predatory lenders and that consumers were at risk. She advised the state legislature to look at the issue in depth. Sorry I don’t have a link, but I don’t think it’s hard to find. Google MERS Suffolk Lawsuit.

As to whether you have to record. The MERS spokes person said over and over in his testimony before the Banking Committee that there was no law anywhere requiring the recording of the note. It was his mantra. I think that one of the major points of that discussion is the whole extremely esoteric yet critical point about the bifurcation of the note from the mortgage and all the ensuing implications and complications. This does involve state recording requirements of real estate transfers – MERS seems to be saying they can pass the note around without transferring (and recording) the mortgage. The fiction of naming MERS as the “nominal” mortgagee is all about that specific point. Many people have additionally pointed out violations of established UCC laws. (I’m no lawyer, I just read a lot). Recordation is all about PROTECTING the interests of almost literally every person involved in a land transfer – the mortgagee as well as the mortgagor and anyone else who might have a secured (or what they think is a secured) interest in the property. People are just literally crazy if they think this isn’t important stuff involving hundreds of years of law, custom and practice. Who is ever going to feel comfortable going forward in purchasing property if they felt that noteholders could just pop out of any closet at any time and profess just because they are entered into some private database, that they have a secured interest in your property? Additionally, who says that some other group at another time can’t set up additional private databases that they also claim substitutes for a function of state recording? The Predatory Lender Network or PLN sets itself up and makes the same claim as MERS – think about it. How about if these databases conflict with one another?

For such a critical function, it is incredible how loosely controlled the whole MERS process actually is – it seems to be strictly run on the “good faith” of the members. There HAVE been instances of MERS members accusing each other of transferring notes improperly to themselves – do we really want to transfer a critical function of government to a self-regulating laissez-faire anarchy of an industry that appears to have violated public faith at every juncture and which has blithely ignored trust law, SEC regulations, state laws, etc.?

It has always been possible (until the advent of MERS) for someone to go to the county courthouse and determine who has an actual real interest in all the real property. It is ridiculous that a private conglomerate can just assert its right to overturn this practice strictly for their members CONVENIENCE and so that they can make more profit.

” It is ridiculous that a private conglomerate can just assert its right to overturn this practice strictly for their members CONVENIENCE and so that they can make more profit.”

This is the heart of the matter.

Btw, from a former lawyer, excellent job of explaining; better than mine.

I commented in a social discussion recently that the mess made it a terrible time to buy a house, and was met with astonishment. The subject got changed before I could put together a clear explanation of why…but more info has come out since.

Thanks for your nice comment.

I can’t believe how blase some people are about this whole issue of recordation and the protections that is offered by this system. I have read that the chain of title and deeds in the US is one reason that real estate is the US is deemed to be desirable in the first place.

I take your point about the requirement to record is based upon the consequences of what happens when you don’t record – it goes back to protecting the order in which interests are protected in bankruptcies, foreclosures, tax and mechanic liens, etc. If you don’t record, you run the risk of a competing lienholder’s interest being placed above yours. That was part of the whole point of recordation in the first place, plus allowing people who were considering purchase to see exactly how a property was encumbered.

There is one other point that drives the recording of deeds – that is the fact that in every single place I am aware of, transfer taxes or tax stamps are paid to the municipality when a property transfers. If someone is standing there with a deed and paying the tax stamps at the county clerk’s office, why would they not go ahead and record the deed?

(One other little side point of interest in all this chicanery and clouding of titles and subverting longstanding laws and customs for private benefit is the new attempt by builders and developers to tack on PRIVATE transfer fees when a house they build and sell sells again sometime in the future. I hope people are smart enough to see this for the giant ripoff it is and refuse to buy properties that have this little jewel inserted in the original deed.)

http://www.marketwatch.com/story/watch-for-real-estate-transfer-fees-2010-11-01