I’ll try to keep this short. MERS is the problem, not the solution. I feel like this needs to be pointed out after reading the opinion of District Judge Sam Sparks in the Texas case of Kramer v. FNMA (i.e., Fannie Mae). Sparks argued that MERS is allowed to assign a Deed of Trust separate from a note and disparages the Plaintiff’s (i.e., Kramer) reliance on the Carpenter v. Longan decision of the U.S. Supreme Court from 1872. Carpenter says that assigning only a mortgage/deed of trust is “a nullity.” Sparks says that statement is merely dicta and not precedent and therefore, he doesn’t have to heed it and besides, Texas law says assignment of only deeds of trust is A-OK. Except that Sparks ignores all the other Texas case law which says exactly the same thing as Carpenter, a lot of which can be found in the brief of David Rogers in the appeal of Kramer v. FNMA, which brief can be found on PACER.
What MERS would like us to believe
MERS would have us believe that it is the agent of every purchaser of a note “secured by” a MERS mortgage/deed of trust. So if a note names Countrywide as the lender and MERS is on the deed of trust, the MERS argument goes, MERS is the agent of Countrywide (of course they never use the word “agent” in the actual document(s), but rather call themselves a “nominee”). Then if Countrywide sells that same note to Fannie Mae, then MERS becomes the agent for Fannie Mae, simply because MERS is named in the deed of trust that accompanies that note. And so on for any subsequent purchasers of that note.
Now let’s pretend for a moment that MERS is correct about this. Let’s say that MERS IS actually the agent for Countrywide and then for Fannie Mae and then for the trust/pool that Fannie Mae supposedly sets up. I don’t buy that, but let’s suppose it is true. Here’s my point though, and this is something the courts need to get (and they would if they weren’t bought off or just plain biased against homeowners): even if MERS IS the agent for all these entities, that STILL does not allow them to assign only the deed of trust/mortgage to ANYONE. And by MERS’ own admission, MERS can only assign the interest it has, which is supposedly the “legal title” to the deed of trust. But wait, there’s more–even if MERS was authorized by Countrywide or Fannie Mae or whomever to assign the deed of trust to some other entity, MERS still can’t legally do that because mortgages and notes are inseparable AND an assignment of ONLY the mortgage/deed of trust is “a nullity.” ALL case law prior to the “financial crisis” (and some even in the midst of it), not just Carpenter, agrees with that proposition.
Even so, MERS is TSOL
MERS attempts to get around these problems by wording their assignments as assignment of BOTH the note AND the mortgage/deed of trust. But in answers to interrogatories I obtained from my own lawsuit against MERS, MERS admitted that it cannot assign notes for two reasons: 1) MERS has no interest in the note to assign (even if they are the agent of the noteholder/owner) and 2) notes do not move through assignments in the land records. So Sparks is wrong on every point: MERS can’t assign only deeds of trust, nor can they assign notes, and Carpenter is not the only (or even the definitive/precedential) source for the proposition that assignments of deeds of trust/mortgages alone are a nullity.
Here are the relevant quotes from the interrogatories, along with a couple others that are significant:
Interrogatory #4: “MERS is only able to transfer what it actually holds and cannot transfer a negotiable instrument by virtue of a transfer of real property.”
Interrogatory #7: “Any language in the assignment which claimed to assign the note could not do so, as notes do not move through assignments in the land records.”
Interrogatory #13: “The MERS assignment can only assign the interest that MERS is holding. When MERS is named as the beneficiary, it holds legal title to the Deed of Trust and can assign the Deed of Trust. Unless MERS is the note holder it cannot transfer the note since the note moves through endorsement and delivery pursuant to the Uniform Commercial Code.”
Reading over #13 again, I’m just flabbergasted–it’s a backhanded admission that MERS splits the note and the deed of trust, yet they will argue til blue in the face that it isn’t. These are interesting times, my friends…
Please feel free to download these interrogatories and use them in whole or in part, or model your own interrogatories after them or do anything else with them you think would help bring MERS to a grinding halt.
IMPORTANT NOTE/DISCLAIMER: The above article is not and should not be construed as legal advice and was not written by an attorney. It is merely a collection of common-sense, rational observations written by a sane, rational layperson with common sense. It is recommended that you consult with an attorney for any and all legal advice and/or action.