February 2, 2010

We have previously made much reference to the Landmark (Kansas) decision on this website. The appeal of the original decision makes mention of the decision of the Supreme Court of Arkansas in the matter of Mortgage Electronic Registration Systems, Inc. (MERS) v. Southwest Homes of Arkansas, 2009 WL 723182 (Ark.). Although the case concerned MERS’ claim that it was a “necessary party” to a foreclosure proceeding because it held “legal title” to the mortgage, the Court disagreed. We highlight specific findings made by the Arkansas Supreme Court as to MERS.

The Court found that the deed of trust provided that all payments are to be made to the lender and that the lender makes decisions on late payments. The Court found that no payments on the underlying debt were ever made to MERS; that MERS did not service the loan in any way; and that MERS did not oversee payments or delinquency of payments or the administration of the loan in any way.

Notwithstanding these undisputed facts, MERS argued that it held an interest in the property through holding “legal title”. The Court rejected MERS’ position, finding that the deed of trust is a deed conveying title to real property to a trustee as security until the grantor repays the loan; that the trustee is limited in use of the title to passing it back to the grantor/borrower in the event of payment or to the lender in the event of foreclosure; and that MERS, which is not a trustee, is not conveyed title and that the deed of trust does not convey title to MERS. The Court concluded that MERS is not the beneficiary even though so designated in the deed of trust: the lender (not MERS) is the beneficiary, as it receives payments on the debt.

The consistency of the Court decisions from Arkansas, Idaho, Nevada, Vermont, New York, South Carolina, California, and others which have repeatedly dismissed MERS’ purported “authority”, when taken together, demonstrate that MERS’ alleged “authority” to do anything (other than perhaps clerical recordkeeping) is a fantasy and a fiction created solely in the minds of MERS, the foreclosure mill attorneys, ”trustees” of securitized mortgage loan trusts, and other purported MERS “assignees” for the express purpose of perpetrating a fraud upon the courts and a theft upon borrowers. Thankfully, these courts have seen through the MERS facade and have held MERS to its limited role, holding that MERS never had the authority to transfer anything. We will continue in our efforts to carry this message to courts throughout the country who have yet to speak on the issue.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com