More On MERS, Standing-Lacking Lenders & Their Multiple Corporate Hat-Wearing Vice Presidents

In a recent story in CounterPunch on the problems the Wall Street mortgage securitization industry faces resulting from courts refusing to let foreclosure actions go forward, and changes in financial reporting requirements imposed by the Financial Accounting Standards Board, writer Pam Martens offers this description about one of the companies in the middle of this entire mess, (and everyone's favorite mortgage electronic registration system), MERS:

• In recent years, MERS has become less of an electronic registration system and more of a serial defendant in courts across the land. In a May 2009 document titled “The Building Blocks of MERS,” the company concedes that “Recently there has been a wave of lawsuits filed by homeowners facing foreclosure which challenge MERS standing…” and then proceeds over the next 30 pages to describe the lawsuits state by state, putting a decidedly optimistic spin on the situation.

• MERS doesn’t have a big roster of employees or lawyers running around the country foreclosing and defending itself in lawsuits. It simply deputizes employees of the banks and mortgage companies that use it as a nominee. It calls these deputies a “certifying officer.”(1) Here’s how they explain this on their web site: “A certifying officer is an officer of the Member [mortgage company or bank] who is appointed a MERS officer by the Corporate Secretary of MERS by the issuance of a MERS Corporate Resolution. The Resolution authorizes the certifying officer to execute documents as a MERS officer.”

She also offers this observation on the mortgage securitization trusts that have been foreclosing on the sliced-up loans it holds without possessing the proper paperwork:

• Astonishingly, representatives for the trusts have been foreclosing on homes across the country, evicting the families, then auctioning the homes, without a proper paper trail on the mortgage assignments or proof that they had legal standing. In some cases, the courts have allowed the representatives to foreclose and evict despite their admission that the original mortgage note is lost. (This raises the question as to whether these mortgage notes are really lost or might have been fraudulently used in multiple securitizations, a concern raised by some Wall Street veterans.)

For more, see The Next Financial Crisis Hits Wall Street, as Judges Start Nixing Foreclosures (New Shockwaves From Courts and Accounting Board).

(1) Known around here as a "multiple corporate hat-wearing vice president," or a "dummy" or "straw" vice president.