January 27, 2011
The tide is finally, after years of struggle, starting to turn, at least in some jurisdictions. As most of you know from the web this week, MERS’ President and CEO R.K. Arnold has resigned. MERS is under attack from all directions, and a securitized trustee bank’s attorney actually admitted in a hearing yesterday that “MERS is nothing but an electronic tracking system”.
In securitization cases, discovery of documents such as the prospectus, the Pooling and Servicing Agreement, and documents as to alleged authorization of MERS to transfer mortgage loan documents is essential to defending a foreclosure attempt. For years, attorneys for the banks, servicers, and “trustees” argued that such discovery (much of which is required to be filed with the Securities and Exchange Commission) was irrelevant, overbroad, and invaded the “privacy” of the bank’s business. These objections are finally starting to be overruled nationwide following the In Re Weisband decision from the Arizona Bankruptcy court, which denied relief from stay as the foreclosing party seeking stay relief “failed to connect the dots”, failing to demonstrate that the servicer had the right to seek stay relief to foreclose on a loan which was purportedly assigned to a securitized mortgage loan trust as the evidence showed the loan never made it into the trust.
This month, FDN attorneys have been successful in both Oregon and New Jersey in compelling, by court Order and over objection of the “bank’s” attorneys, the production of PSAs, trust formation documents, trust prospectuses, and documents as to the alleged authority of MERS. FDN attorneys Jeff Barnes, Esq. and Philip Anderson, Esq. in Oregon, and Jeff Barnes, Esq. and Michael Jacobson, Esq. in New Jersey, have obtained court rulings compelling this critical discovery. In other cases where Mr. Barnes was able to obtain this discovery by court order, it has been revealed that the purported assignment to a trust years after the trust closed violated the very requirements of Mortgage Loan Conveyance provisions of the PSA. Thus and in conformity with Weisband, the loan never made it into the trust. The resultant lack of standing, lack of chain of title, and lack of real party in interest issues are scheduled to be argued by Mr. Barnes before various courts in February, and a trustee in a bankruptcy case in Mississippi has filed an adversary proceeding based on evidence that the purported assignment of the loan, which was done years after the trust closed, was ineffective as it violated the restrictions of the PSA.
Mr. Barnes and Mr. Jacobson have a history of obtaining court orders compelling this discovery in cases in New Jersey, with the cases having ultimately been dismissed when the foreclosing Plaintiff failed to comply with the Court’s Orders to produce the subject discovery.
Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com