I read this complaint last night...
I wish I could say that any of the allegations in this complaint surprised me, but, nope, no surprise at all.
As an REO title specialist in Maryland I have seen HUNDREDS of cases like this where there was an assignment out of MERS into the "note holder" stuck smack in the middle of the chain of title, filed sometime "around" the filing date of the foreclosure. I must admit however that not once did my attorney abstractors question the validity of these documents. Nor, evidently, did the court as all of these sales were ratified with the court and the property proceeded to settlement to an arms-length purchaser.
I have long and often stated that it is not good business to allow, or more to the point, force upon the consuming public by way of contract addenda, cradle to grave closings. I would suggest most other mills nationwide have behaved in exactly the same manner. This is but the tip of the iceburg I fear.
In our local market there are 3 or 4 firms handling 90% of all foreclosures in the Maryland/Virginia area. When you call some of these firms their directory (please do not begin to think that they have a receptionist) will take you through automated hell and lo and behold one of the prompts will be for their "affiliated" title agency. Why are these firms any different than that of Mr. Stern's? They are not, I would contend, they just haven't been pulled into the litigation yet.
It was with particular interest that I read paragraph 13 of the complaint wherein the plaintiff calls the shareholders of MERS, namely, Bank of America, Chase, CitiMortgage, Inc., Fannie Mae, Freddie Mac, HSBC, Sun Trust and Wells Fargo "co-conspirators". Paragraph 14 refers specifically to "the present defendants"; can we take that to mean that there will be more defendants named in the future as this case makes it way through the court? We must remember too that some of the entities namely, Fannie Mae and Freddie Mac are on life support at the expense of the tax paying public. If they are pulled into this litigation will be be held responsible for the payment of the HUGE legal fees? Probably, and that will further infuriate me!
And now I wonder what we are going to have to contend with in the future as more and more of these type suits are filed nationwide. I have a tendency to overthink things sometimes and sometimes I am just downright stupid, so the questions may not make any sense to you, but these are some of the questions that have popped into my head this morning:
- If the property we are conveying is part of the "class" how will we know?
- Does the fact that the property is part of the "class" create a lis pendens?
- How do we take exception to the foreclosure in all policies we issue to both lender and owner, or should we take exception? Supposing that we do, what lender will accept that policy? And, for that matter, what borrower would accept that?
- Will there be a glut of new title claims filed as a result of this litigation?
- What do we, as title agents, need to do to protect ourselves from being brought into these suits? Or is that a non-issue?
I remember seeing a memo from Fannie Mae some months ago stating that they would no longer allow foreclosure actions to be brought in the name of MERS and advising their "mills" to file assignments in advance of the filing of the foreclosure action. I do not know who they used to execute these assignments, but if it were yet another "Secretary or "Vice President" of MERS, we are still faced with possible defective foreclosure actions if the allegations in the suit are proven to be true. I personally have a drawer full of Signing Authorizations which probably name persons who are employed by the mills as "Secretary" or "Vice President" of MERS. It never occured to me to question the validity of these authorities. Nor, I must admit, did I ever go over each assignment with a fine toothed comb checking dates of acknowledgements, etc.
And of course to further fuel my rant is paragraph 31 of the complaint, which is a quote from David Stern as to the continuing foreclosure rout;
"I'm like, Oh my God, it's great" I mean, I hate to hear people are losing their homes and credit isn't available and credit is such that they can't re-fi, but if you are in our niche, it's what we do and it's what we want to see."
His arrogance in discussing the hardships being faced by hundreds of thousands of citizens just makes me shiver.
I know that as the day goes on I will come up with some other silly questions, but these are just a few that come to mind right now.