Happy Fourth of July!



I think we can handle it today, right

Oh, and incidentally, I know you know this, but we now realize, recognize and interpret “all men” to mean “all people,” including women, and people of all colors, creeds, and religion.  That is the real face of America.  This cuts against how literally certain people want to interpret old documents that were intended to be living documents, e.g. Decl. of Ind., the Constitution, religious texts (ahem, J. Scalia), or at least when the literal interpretation suits them.

The Declaration of Independence: A Transcription

IN CONGRESS, July 4, 1776.

The unanimous Declaration of the thirteen united States of America,

When in the Course of human events, it becomes necessary for one people to dissolve the political bands which have connected them with another, and to assume among the powers of the earth, the separate and equal station to which the Laws of Nature and of Nature’s God entitle them, a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation.

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.–That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, –That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness. Prudence, indeed, will dictate that Governments long established should not be changed for light and transient causes; and accordingly all experience hath shewn, that mankind are more disposed to suffer, while evils are sufferable, than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security.–Such has been the patient sufferance of these Colonies; and such is now the necessity which constrains them to alter their former Systems of Government. The history of the present King of Great Britain is a history of repeated injuries and usurpations, all having in direct object the establishment of an absolute Tyranny over these States. To prove this, let Facts be submitted to a candid world.

He has refused his Assent to Laws, the most wholesome and necessary for the public good.
He has forbidden his Governors to pass Laws of immediate and pressing importance, unless suspended in their operation till his Assent should be obtained; and when so suspended, he has utterly neglected to attend to them.
He has refused to pass other Laws for the accommodation of large districts of people, unless those people would relinquish the right of Representation in the Legislature, a right inestimable to them and formidable to tyrants only.
He has called together legislative bodies at places unusual, uncomfortable, and distant from the depository of their public Records, for the sole purpose of fatiguing them into compliance with his measures.
He has dissolved Representative Houses repeatedly, for opposing with manly firmness his invasions on the rights of the people.
He has refused for a long time, after such dissolutions, to cause others to be elected; whereby the Legislative powers, incapable of Annihilation, have returned to the People at large for their exercise; the State remaining in the mean time exposed to all the dangers of invasion from without, and convulsions within.
He has endeavoured to prevent the population of these States; for that purpose obstructing the Laws for Naturalization of Foreigners; refusing to pass others to encourage their migrations hither, and raising the conditions of new Appropriations of Lands.
He has obstructed the Administration of Justice, by refusing his Assent to Laws for establishing Judiciary powers.
He has made Judges dependent on his Will alone, for the tenure of their offices, and the amount and payment of their salaries.
He has erected a multitude of New Offices, and sent hither swarms of Officers to harrass our people, and eat out their substance.
He has kept among us, in times of peace, Standing Armies without the Consent of our legislatures.
He has affected to render the Military independent of and superior to the Civil power.
He has combined with others to subject us to a jurisdiction foreign to our constitution, and unacknowledged by our laws; giving his Assent to their Acts of pretended Legislation:
For Quartering large bodies of armed troops among us:
For protecting them, by a mock Trial, from punishment for any Murders which they should commit on the Inhabitants of these States:
For cutting off our Trade with all parts of the world:
For imposing Taxes on us without our Consent:
For depriving us in many cases, of the benefits of Trial by Jury:
For transporting us beyond Seas to be tried for pretended offences
For abolishing the free System of English Laws in a neighbouring Province, establishing therein an Arbitrary government, and enlarging its Boundaries so as to render it at once an example and fit instrument for introducing the same absolute rule into these Colonies:
For taking away our Charters, abolishing our most valuable Laws, and altering fundamentally the Forms of our Governments:
For suspending our own Legislatures, and declaring themselves invested with power to legislate for us in all cases whatsoever.
He has abdicated Government here, by declaring us out of his Protection and waging War against us.
He has plundered our seas, ravaged our Coasts, burnt our towns, and destroyed the lives of our people.
He is at this time transporting large Armies of foreign Mercenaries to compleat the works of death, desolation and tyranny, already begun with circumstances of Cruelty & perfidy scarcely paralleled in the most barbarous ages, and totally unworthy the Head of a civilized nation.
He has constrained our fellow Citizens taken Captive on the high Seas to bear Arms against their Country, to become the executioners of their friends and Brethren, or to fall themselves by their Hands.
He has excited domestic insurrections amongst us, and has endeavoured to bring on the inhabitants of our frontiers, the merciless Indian Savages, whose known rule of warfare, is an undistinguished destruction of all ages, sexes and conditions.

In every stage of these Oppressions We have Petitioned for Redress in the most humble terms: Our repeated Petitions have been answered only by repeated injury. A Prince whose character is thus marked by every act which may define a Tyrant, is unfit to be the ruler of a free people.

Nor have We been wanting in attentions to our Brittish brethren. We have warned them from time to time of attempts by their legislature to extend an unwarrantable jurisdiction over us. We have reminded them of the circumstances of our emigration and settlement here. We have appealed to their native justice and magnanimity, and we have conjured them by the ties of our common kindred to disavow these usurpations, which, would inevitably interrupt our connections and correspondence. They too have been deaf to the voice of justice and of consanguinity. We must, therefore, acquiesce in the necessity, which denounces our Separation, and hold them, as we hold the rest of mankind, Enemies in War, in Peace Friends.

We, therefore, the Representatives of the united States of America, in General Congress, Assembled, appealing to the Supreme Judge of the world for the rectitude of our intentions, do, in the Name, and by Authority of the good People of these Colonies, solemnly publish and declare, That these United Colonies are, and of Right ought to be Free and Independent States; that they are Absolved from all Allegiance to the British Crown, and that all political connection between them and the State of Great Britain, is and ought to be totally dissolved; and that as Free and Independent States, they have full Power to levy War, conclude Peace, contract Alliances, establish Commerce, and to do all other Acts and Things which Independent States may of right do. And for the support of this Declaration, with a firm reliance on the protection of divine Providence, we mutually pledge to each other our Lives, our Fortunes and our sacred Honor.

Foreclosure News: OCC Will Escheat Funds Designated for Homeowners, OCC Restricts Chase, US Bank, Wells via Amended Consent Orders

The OCC issued a press release today that it plans to escheat uncashed payments from the Independent Foreclosure Review by the end of 2015.  Also, it has imposed restrictions on U.S. Bank, Chase, Wells, and others for not meeting Consent Order requirements, stating, in part:

The OCC terminated orders against Bank of America, N.A.; Citibank, N.A.; and PNC Bank, N.A., because it determined that these institutions have complied with the orders issued in April 2011 and amendments issued in February 2013.

The OCC also has determined that EverBank; HSBC Bank USA, N.A.; JPMorgan Chase Bank, N.A.; Santander Bank, National Association; U.S. Bank National Association; and Wells Fargo Bank, N.A., have not met all of the requirements of the consent orders. As a result, the amended orders issued today to these banks restrict certain business activities that they conduct. The restrictions include limitations on:

  • acquisition of residential mortgage servicing or residential mortgage servicing rights (does not apply to servicing associated with new originations or refinancings by the banks or contracts for new originations by the banks);
  • new contracts for the bank to perform residential mortgage servicing for other parties;
  • outsourcing or sub-servicing of new residential mortgage servicing activities to other parties;
  • off-shoring new residential mortgage servicing activities; and
  • new appointments of senior officers responsible for residential mortgage servicing or residential mortgage servicing risk management and compliance.

These restrictions vary based on the particular circumstance of each bank.

In all cases, OCC examiners will continue to oversee these institutions’ corrective actions and mortgage servicing activities as part of the agency’s ongoing supervision.

California Trial Court Rules That 331 Million Taken From National Mortgage Settlement Owed Back to Homeowner Fund

See Gretchen Morgenson’s article in the New York Times for more details.

A court ruled late Friday that California is obligated to return $331 million that it took from a fund designated to help troubled borrowers but instead used to plug holes in the state’s budget.

The ruling, by a state court judge in Sacramento, came in response to a lawsuit filed last year against Gov. Jerry Brown by three nonprofit groups offering counseling to homeowners. They contended that Mr. Brown improperly diverted some of the money California received in 2012 as part of a $25 billion nationwide settlement with the country’s largest banks over mortgage servicing improprieties.

The plaintiffs argued that $350 million of California’s share of the settlement was wrongly removed from a special fund dedicated to helping troubled homeowners avoid foreclosure through counseling and other educational services.

Nationstar Lawsuit to Watch

A new investor lawsuit filed against Nationstar was reported by Reuters, in an article called, “Securities lawsuit says Nationstar concealed illicit practices,” by Dena Aubin on June 5, 2015. The case is  City of St. Clair Shores Police and Fire Retirement System v. Nationstar Mortgage Holdings et al, U.S. District Court, Southern District of Florida, No. 15-cv-61170.St Clair v Nationstar Complaint

Of interest from the Complaint, the investors allege:

Until late 2013, Ocwen Financial Corporation (“Ocwen”) and entities affiliated with Ocwen had grown to become the nation’s largest non-bank subprime mortgage servicer by purchasing mortgage servicing rights (“MSRs”) from banking entities who no longer wanted to service their own portfolios due to increased regulatory attention. 4. However, by late 2013, federal regulators, followed in early 2014 by New York state regulators, commenced regulatory enforcement actions against Ocwen accusing it of illegally gouging customers and improperly profiting from doing so. By 2014, the Ocwen-related entities, mired in litigation and facing delisting proceedings, began retreating from the loan serving industry. 5. Nationstar grew its own portfolio exponentially by purchasing MSRs from Ocwen and from banks that Ocwen could no longer purchase from, promising that due to the Company’s own superior loan handling proficiencies and ability to comply with the law while profitably servicing loans, Nationstar could be profitable where Ocwen had not been. Beginning in early 2014, Nationstar began acquiring tens of millions of dollars of MSRs from Ocwen and other bank entities.

However, unbeknownst to investors, throughout the Class Period defendants knew or recklessly disregarded that: (a) Nationstar’s deficiencies in management control and supervision rendered it unable to comply with laws and regulations applicable to servicing MSRs; (b) Nationstar was gouging mortgagors – and illegally enhancing its profits through unsustainable means – via illicit practices, such as charging for repeated, unnecessary inspections, which resulted in additional late payment fees, and by pressuring mortgagors to carry out expensive modifications and refinancing of their mortgages;

. . .

(d) Heightened regulatory scrutiny into MSR transferring and servicing – including a probe into Nationstar’s own loan servicing practices launched by the New York State Department of Financial Services (“NY DFS”) in March 2014 – had significantly increased Nationstar’s costs of servicing MSRs and diminished the profitability and carrying value of the Company’s MSR portfolio; (e) In order to deflect regulatory scrutiny in the wake of the regulatory enforcement actions taken against Ocwen, Nationstar had abandoned certain of its own abusive loan servicing practices and adopted others required by regulators, which had made its loan servicing business less profitable and rendered Nationstar’s MSR portfolio less valuable to the Company;

This lawsuit by investors against Nationstar for padding its profit projections with loan servicing income based on illegal  practices and that had to be ceased (shutting down such a lucrative profit source for said investors) should be interesting to watch.  Funny how wealthy investors can throw enough money at lawyers and investigators to find out exactly what went down.  Meanwhile, the parties directly damaged by the bad acts of Nationstar and Ocwen, its source of loans and bad ideas,  parties such as the borrowers, consumers, homeowners were already poured out by the courts with nary a listen for their claims of damage from these harmful practices.  Poured out onto the street, no less.  Literally.

Sometimes it would seem that the nicer your shoes, the shinier your justice. At any rate, I am optimistic that the investors’ attorneys will uncover meaningful and interesting discovery regarding these shady practices.

Please don’t think I oppose the investors. I fully support their right to pursue justice too.  Perhaps I am just a wee bit antagonized by how borrowers/consumers are treated by the courts compared to other litigants.  And I might be the weensiest bit jealous of their war chest given the resources needed to bring down the Goliaths.

Speaking of war chests, it’s too bad that virtually none of the National Mortgage Settlement dollars actually made it into the hands of the homeowners affected, or into the coffers of law firms willing to represent homeowners at discounted fees, or pro bono, with the relief funds.  Are you listening, Arizona Legislature?  We remember that you swept half of the homeowners’ money by threatening then-Attorney General Horne’s entire budget.  And Attorney General Horne?  We aren’t so certain that you fought all that hard for that homeowner money, given your speech to one homeowner group about having to have panels to determine who “deserved” relief, given the moral hazards involved.  And you weren’t talking about the “moral hazards” presented by bailed out banks being allowed to dictate the terms of their own civil penalties while keeping their jobs and exorbitant bonuses.  But hey, somebody has to keep Bergdorf Goodman and the Upper East Side in business.

Also, Jan Brewer?  We remember that a lot of homeowner money was funneled to for-profit private prisons run by cronies.  Because what could be wrong or morally hazardous about profiteering off of locking up petty, non-violent criminals?

A lot of the money was never disbursed, and some of it was disbursed to “non-profits” with Board Members consisting of lawyers from the same firms representing the wrongdoer banks, such as Wells Fargo.

We aren’t bitter though.  We’ll keep fighting for the Arizona homeowner.

Dismissals of Lawsuits by Consumers, Employees and for Civil Rights Violations Disparately Impacted by Twombly Iqbal

By Beth:

Those attorneys who represent consumers or individuals against corporations will be in the “tell me something I don’t know” category regarding the way the district courts treat the 12(b)(6) motion as the new summary judgment motion.  In other words, post-Iqbal and Twombly, the pleading standards are being used to dismiss the cases of those with the least access to pre-suit discovery from high-powered Goliaths, with sole custody and control of discovery.  Those of us who litigated for years prior to Iqbal and Twombly have lamented the sea change in long-established fundamental pleading standards.

The district courts have gone beyond what was envisioned by Twombly (a complex anti-trust case) (read Justice Souter’s important caveats) and Iqbal (a case against the US Attorney General, with important immunity issues not at issue in your typical consumer litigation).  Many questioned whether the concerns of discovery costs for a defendant were sufficient reasons to change the established pleading tradition of the Federal Rules “notice pleading” and Conley v. Gibson in the first place.  The perversion of these standards to allow judges to decide what is “plausible” by the facts which are supposed to be “taken as true” unless they are of the “little green man on the moon” variety (again, see Souter) has been one of the most radical, creeping changes in modern civil jurisprudence.  We have been referring to it as “12(b)(6) abuse for awhile now.

As reported this week in the Consumer Law and Policy Blog, full article at the link:

A study to be published in a forthcoming edition of the Virginia Law Review examines the effect of the Court’s Iqbal and Twombly decisions and concludes that its effect has been significant. The article’s abstract summarizes its findings:

First, this Article provides data showing that dismissals of employment discrimination and civil rights cases have risen significantly in the wake of Iqbal. These results remained significant even after controlling for potential confounding factors. Second, the data also suggest that certain factors interact with the plausibility standard to influence the resolution of a motion to dismiss, including perhaps most importantly the institutional status of the plaintiff and defendant. Individuals have fared poorly under the plausibility regime, at least when compared to corporate and governmental agents and entities. These effects remained significant even after controlling for several potentially confounding variables. Finally, by analyzing data on the progress of cases after a motion to dismiss has been adjudicated, this Article shows that the advent of heightened pleading has not resulted in higher quality claims.

The study found that cases brought by individuals represented by lawyers were dismissed 42 percent of the time before Iqbal and 59 percent after. For corporate plaintiffs, the dismissal rate was almost unchanged, moving from 37 up to 38 percent.

Further, the data show that dismissals of employment discrimination and civil rights cases have risen significantly in the wake of Iqbal.

See Reinert, Alex, Measuring the Impact of Plausibility Pleading (May 6, 2015). __ Virginia Law Review __ (2015 Forthcoming); Cardozo Legal Studies Research Paper No. 455. Available at SSRN:http://ssrn.com/abstract=2603273


In the United States, modern civil procedure began in 1938 with the promulgation of the Federal Rules of Civil Procedure. From then, until very recently, the notice pleading standard – emphasizing simplicity and brevity in pleadings over technicality – was held up as an example of the Rule’s commitment to adjudicating the merits of every claim and avoiding premature and wasteful disputes that often had little to do with merits. In Bell Atlantic v. Twombly and Ashcroft v. Iqbal, announced in 2007 and 2009, the United States Supreme Court revisited the notice pleading standard, announcing that “plausibility pleading” must now be the standard for assessing whether a complaint’s allegations are sufficient to justify moving to discovery and merits adjudication. This Article offers a comprehensive analysis of the impact of the plausibility pleading standard on resolutions of motions to dismiss in almost 4200 cases from 15 different judicial districts, representing all 12 general jurisdiction circuit courts of appeal. Relying on data obtained from all published and unpublished opinions in these districts for the years 2006 and 2010, this study provides the most detailed analysis to date of the impact that plausibility pleading and other variables have had on the resolutions of motions to dismiss in civil cases.The data reported here suggest that many prior studies have failed adequately to capture the full impact of Iqbal and Twombly on the resolution of motions to dismiss in federal court. First, this Article provides data showing that dismissals of employment discrimination and civil rights cases have risen significantly in the wake of Iqbal. These results remained significant even after controlling for potential confounding factors. Second, the data also suggest that certain factors interact with the plausibility standard to influence the resolution of a motion to dismiss, including perhaps most importantly the institutional status of the plaintiff and defendant. Individuals have fared poorly under the plausibility regime, at least when compared to corporate and governmental agents and entities. These effects remained significant even after controlling for several potentially confounding variables. Finally, by analyzing data on the progress of cases after a motion to dismiss has been adjudicated, this Article shows that the advent of heightened pleading has not resulted in higher quality claims.

Along with providing an important descriptive account of the impact that plausibility pleading has had on the course of federal litigation, this Article suggests two heretofore unexplored bases for questioning the wisdom of the transition initiated by Twombly and solidified by Iqbal. First, while one should not be shocked by the observation that civil rights and employment discrimination claims suffer under the plausibility pleading regime, one should still be troubled by it given the historical role that federal courts have played in such cases. Second, to the extent that the plausibility regime has exacerbated inequality in the courts between individual litigants on one hand and corporate and governmental entities on the other, without increasing overall case quality, there should be wider agreement that such a change is to be lamented.

The New York Times reported yesterday, link here, excerpt below:

Six years ago this week, the Supreme Court transformed civil litigation in the federal courts, making it much easier for judges to dismiss cases soon after they are filed.

The decision, Ashcroft v. Iqbal, may be the most consequential ruling in Chief Justice John G. Roberts Jr.’s 10-year tenure.

It has been cited in more than 85,000 lower-court decisions. But lawyers and law professors continue to differ about its practical effects, which are harder to measure than one may think. The latest and probably most thorough in a long series of studies, to be published in the Virginia Law Review, concluded that the decision had hit the powerless the hardest.

Before Iqbal, cases brought by individuals represented by lawyers were dismissed 42 percent of the time. After Iqbal, the rate was 59 percent. For corporate plaintiffs, the rates of dismissal stayed basically flat, edging up to 38 percent from 37 percent.

. . .

The new standard is sometimes called “plausibility pleading.” Soon after it was announced, Justice Ruth Bader Ginsburg, who had dissented, told a group of judges that it had “messed up the federal rules” governing civil litigation.

A couple of years later, a federal appeals court judge said the new standard might have required dismissal of the terse complaint in Brown v. Board of Education, the one that led to the Supreme Court’s landmark 1954 school desegregation decision.

MERS Lacks Legal Authority and Public Accountability

Harvard Amicus Brief on MERS

Some of the best quotes,

  • Mortgage servicing companies, banks, courts and government agencies have all expressed astonishment at the extent to which MERS database is inaccurate. (p. 24)
  • “Simply put, ‘MERS is the Wikipedia of land registration systems.’ Culhane v. Aurora Loan Services, 826 F. Supp. 2d 352 (D. Mass. 2011) aff’d, 708 F.3d 282 (1st Cir. 2013).” (p. 12)
  • Janis Smith, a spokeswoman for Fannie Mae, admitted Fannie Mae kept its own records and that “We would never rely on it [MERS] to find ownership.” Powell and Morgenson,
    supra p. 32. (p. 25)
  • Judge Jennifer Bailey, a circuit court judge in Miami stated of 60,000 foreclosures filed in 2009 in her court, “[A]lmost every single one of them… represents a situation where the bank’s position is constantly shifting and changing because they don’t know what the Sam Hill is going on in their files.” Transcript of Hearing on Order to Show Cause at 5, HSBC Bank USA v. Eslava, No. 1-2008-CA-055313 (Fla. Cir. Ct. May 6, 2010).
  • “…MERS never requests or possesses proof that one of its members in fact holds the mortgage note or is the agent of the note holder when that member seeks to foreclose.”
  • Because MERS records are shrouded in secrecy, it is also impossible to know just how incomplete or inaccurate MERS records are. However, surveys and
    reporting by public media have suggested that the MERS database is alarmingly inaccurate. (p. 23)
  • When one compares these costs to the costs of record-keeping that the industry targeted for elimination, $10 per recordation, amounting to around $30 per loan, seems a small amount to pay to protect a family’s interest in the ability to discover who owns their loan, who would execute a foreclosure proceeding against them, and to challenge a party attempting to do so on the basis of mistake or fraud
  •  “The creators of MERS did not lobby Congress for a uniform, electronic mortgage system that could have retained the public recording system’s transparency and reduced costs. Rather, without judicially or statutorily recognized legal authority, they independently launched MERS as a private system, and created legal theories to legitimate the system post facto.” (p. 13)
  • In Professor Joseph Singer’s words, MERS allowed banks “to be prolific about securitizing those mortgages but complacent about formalizing mortgage assignments. The resultwas that the banks made many, many mistakes in keeping track of these transactions. Formal records of mortgage transfers are often incomplete or incorrect; the chain of title for many properties appears to be irretrievably broken.” Joseph Singer, Foreclosure and the Failures of Formality, 46 Conn. L. Rev. 497, 503-04 (2013).” (pp. 13-14)
  • While MERS’ creators knew that differences in state real property law would pose problems but chose not to investigate the possible impact, Nevertheless, MERS conducted no fifty-state analysis of the potential impact of its operations. Memorandum from Covington & Burling to R.K. Arnold, President and CEO, MERSCORP, Inc. (Sept. 1, 1997) (on file with the Duke LawJournal). (p. 22)
  • MERS’s attempt to establish “facts on the ground supporting its existence therefore does not deserve deference, and in practice has not worked. State laws have unsurprisingly taken disparate positions with respect to numerous aspects of MERS, and borrowers are now impacted in vastly different ways based on their jurisdiction. Laura A. Steven, MERS and the Mortgage Crisis: Obfuscating Loan Ownership and the Need for Clarity,” 7 Brook. J. Corp. Fin. & Com. L. 251, 256-57 (2012). (p. 23)
  • MERS inserts a placeholder in the public record. It thereby grafts itself onto systems for recording interests in land, while rendering that recording meaningless.
  • MERS has therefore privatized the majority of mortgage records in the country while undermining the value of county public records. Peterson, Two Faces, supra p. 9, at 132 (2011).
  • MERS, in effect, creates a lacuna in the record, and makes meaningless the record onto which it is grafted. As Professor Christopher Peterson writes, “Recording mortgages in MERS’s name and subsequent refusal to record assignments is not a technological innovation. On the contrary, it is an example of atrophy of the mortgage market’s information infrastructure and the rule of law.” Peterson, Foreclosure, supra p. 4, at 1404. (p. 26)
  • Additionally, the Interagency Report found that servicers had failed in conducting appropriate due diligence assessments of and quality control processes pertaining to MERS, by failing to monitor, evaluate, and appropriately manage the MERS contractual relationship, assess internal control processes at MERS, ensure the accuracy of servicing transfers, and ensure that servicers’ records matched MERS records. Id.Federal Reserve, Office of the Comptroller of the Currency, and Office of Thrift Supervision, Interagency Review of Foreclosure Policies and Practices 10-11 (2011).

The brief also recognizes MERS shape-shifting tendency to take contradictory positions given the jurisdiction:

  • For example, when MERS has brought foreclosure actions, it has argued that it was an actual mortgagee or assignee. See, e.g., Landmark National Bank v. Kesler, 40 Kan. App. 2d 325, 327(2008) (“MERS claims that it holds the title to the second mortgage… MERS objects to its characterization as an agent.”).

  • However, when faced with suits alleging fraud, deceptive practices, or when it wished to avoid license and registration requirements, it argued that it was merely an agent without exposure toliability, and did not have the same power as a mortgage owner. See, e.g., Escher v. Decision One Mortgage Co., 369 B.R. 862 n.8 (Bankr. E.D. Pa. 2007) (“MERS’s role as nominee leads the Court to conclude that it cannot be liable on any of the Plaintiff’s [Truth in Lending or Pennsylvania consumer protection] claims. A nominee is understood to be an agent for another.”).

  • See also Peterson, Foreclosure, supra p. 4, at 1376. MERS’s adoption of inconsistent positions across jurisdictions to obtain favorable outcomes in litigation underscores its fundamentallack of legal authority. See also Landmark Nat’l Bank v. Kesler, 289 Kan. 528, 216 P.3d 158, 165–66 (2009) (stating that MERS defines its role “in much the same way that the blind men of Indian legend described an elephant—their description depended on which part they were touching at any given time”).



Lots of Homeowner “Friends of Court” Swinging Into Yvanova Case in California Supreme Court

There have been several amicus curiae briefs filed in the last few days in the Yvanova case, currently pending before the California Supreme Court on Glaski-type issues of a borrower’s ability to challenge the foreclosing party’s authority, whether it came from a bad assignment, or from a hallucination from the Dalai Lama.

California Attorney General FINAL-Amicus Brief-Yvanova pdf pdf (Attachment) Copy

National Consumer Law Center (NCLC) and National Association of Consumer Advocates (NACA)NCLC amicus brief Yvanova

Consumer Attorneys of California (CAOC)CAOC brief Consumer Attorneys Amicus Yvanova


And let’s not forget this doozie filed by the Banker’s Association.  2015-04-20_Yvanova_v _New_Century_Amicus_Cal_Bankers_Assoc (2)

Maybe I’m not being entirely fair but it seems to consist mainly of a major distraction tactic of showing false concern for homeowners.  You see, guys, these are just homeowner “delay” tactics (these pesky laws as set forth in the statutes and the contracts governing the loan transaction), and “studies” (no doubt commissioned by the Banker’s Aid Relief Charitable Society) show that giving distressed homeowners more time in their homes does not improve their chance of successful reinstatement.”  Huh?  What does that have to do with the issue of whether a foreclosing party is civilly liable for exercising authority he does not have to take real property that does not belong to him?