Massive 2012 Mortgage Release Fraud By Mortgage Electronic Registration Systems

January 10, 2013

 This article was originally published in Lynn Szymoniak’s publication, ‘Fraud Digest,’ and is republished here as a resource for those interested in foreclosures and document fraud.

August 12, 2012

What do I say to potential buyers of my condo?  “I promise you that U.S. Bank as Trustee for some unidentified trust has been paid off – but, no, I can’t even show you the canceled note and I have no idea why MERS filed a Mortgage Release instead of U.S. Bank.”

I bought a condo as my retirement home. Then I could not retire as planned, because I needed to care for my mom a little longer than expected. When I could sell, the market had crashed.

I defaulted, and was sued for foreclosure.  It was a David Stern Law Offices foreclosure. While the original lender was Suntrust Mortgage, I was sued by “U.S. Bank as Trustee.”  This was a Mortgage Electronic Registration Systems (MERS) mortgage, serviced by GMAC.

The Lis Pendens (foreclosure initiation) was filed April 2, 2010.

On May 13, 2010, an Assignment of Mortgage was filed in the county Official Records.  Jeffrey Stephan signed this Assignment.  Stephan was identified as Vice President, Mortgage Electronic Registration Systems, Inc. as Nominee for Southtrust Mortgage Corp. d/b/a Equibanc Mortgage. (Equibanc was a Wachovia division that has now been closed.)

The mortgage was assigned to U.S. Bank National Association as Trustee. Again, no specific trust was identified. The Assignment was dated April 15, 2010.

The Stern Law Offices filed an unverified complaint after the FL Supreme Court had amended the civil procedure rules to require that complaints be verified. I also thought that I was entitled to the full name of the plaintiff – that is, the identity of the trust, so we filed a Motion to Dismiss.

The MERS system does not identify the trust.  When the MINS number is entered for this loan, a message appears onscreen to please contact the servicer for information on the owner of this loan.

The Stern law firm collapsed.  The case was assigned to a new firm, Elizabeth Wellborn Law Offices.

At one point during the discussions with Wellborn lawyers, my lawyer was told that a Credit Suisse Trust had bought the loan and U.S. Bank was trustee for that trust.  Although I had the MIN number and loan number, no search was ever successful in identifying the trust.

Eventually, we won our Motion to Dismiss and were even awarded attorneys fees for our efforts.  Because of some good fortune, I had the funds to pay off this loan.

I got a pay-off figure from GMAC.  I paid off the loan. I waited for the cancelled original note. No canceled note has ever arrived.

On July 15, 2012, GMAC Mortgage filed a “Release of Mortgage” in the county official records.

William Jensen, Assistant Secretary, Mortgage Electronic Registration Systems, Inc., signed this Release.

MERS claims on the release to be the holder of my mortgage (though we all know by now that MERS does not hold any mortgage documents.)

If I wanted to sell the condo (I do, by the way), anyone doing a title search would see that I was sued for foreclosure by U.S. Bank, a mortgage assignment was filed by MERS assigning the mortgage to U.S. Bank, and then there was never a Satisfaction or Release filed by U.S. Bank.

What do I say to potential buyers of my condo?  “I promise you that U.S. Bank as Trustee for some unidentified trust has been paid off – but, no, I can’t even show you the canceled note and I have no idea why MERS filed a release instead of U.S. Bank.”

An examination of the county records shows there are tens of thousands of these MERS releases filed in 2012, prepared and filed AFTER MERS has already assigned the loan to a securitized trust. 

MERS is operating under a Consent Order issued by the Federal Reserve, the FDIC, the Office of Thrift Supervision and the Federal Housing Finance Agency on April 13, 2011. These agencies need to stop MERS from this continued destruction of the country’s land records.