DEPOSITION of A “REAL” VICE PRESIDENT of MERS WILLIAM “BILL” HULTMAN

From: b.daviesmd6605

Bill joined MERS in February, 1998. He brings more than 14 years of broad experience in finance and treasury. Before joining MERS, he served as Director of Asset Liability Management for Barnett Banks, Inc., Asset Liability Manager at Marine Midland Bank and Treasurer of Empire of America FSB. As a conservator for the FDIC, he managed insolvent institutions for the Resolution Trust Corporation.
Prior to his experience in the financial services industry, Bill was a partner in the law firm of Moot and Sprague, as well as an attorney at Forest Oil Corporation, specializing in the areas of securities and corporate law.

U.S. Banks WILL BE ‘Toast’ If Struggling Homeowners Keep Walking Away (VIDEO)

Huffington Post | Sherry Shen First Posted: 06- 2-10 05:11 PM | Updated: 06- 2-10 05:11 PM

Felix Salmon

click for video

Reuters blogger Felix Salmon believes that if more and more struggling homeowners continue walking away from their homes, U.S. banks could be “toast.”

As strategically defaults continue to rise, some homeowners are using their inability to pay their mortgage to live rent free — often for more than a year, the New York Times reported.

“Trying to renegotiate your mortgage is not a morally reprehensible thing to do,” Salmon said, pointing out that mainstream media organization’s like the New York Times magazine has been publishing columns about this trend and how it makes so much “financial sense.” Corporations walk away from commercial mortgages, Salmon said. “It’s not clear to me why an individual should behave any different,” Salmon said.

Wells Fargo is most exposed to the trend, affecting the bank’s livelihood. “Sand state” banks such as those in Florida and California are also far more exposed. Here’s more from Salmon:

“From the bank’s point of view, if this catches on, there’s a very large number of banks in this country who are just toast. And in hindsight they were just much better off dealing in a realistic way with these borrowers a year ago or two years ago when the problem first reeled its head instead of extending and pretending. Now they are in a pickle.”

“If this trend continues, then the banking system is probably insolvent,” he said.

Tracking Loans Through a Firm That Holds Millions: MERS

Kevin P. Casey for The New York Times: Darlene and Robert Blendheim of Seattle are struggling to keep their home after their subprime lender went out of business.

By MIKE McINTIRE NYTimes
Published: April 23, 2009

Judge Walt Logan had seen enough. As a county judge in Florida, he had 28 cases pending in which an entity called MERS wanted to foreclose on homeowners even though it had never lent them any money.

Into the Mortgage NetherworldGraphicInto the Mortgage Netherworld

MERS, a tiny data-management company, claimed the right to foreclose, but would not explain how it came to possess the mortgage notes originally issued by banks. Judge Logan summoned a MERS lawyer to the Pinellas County courthouse and insisted that that fundamental question be answered before he permitted the drastic step of seizing someone’s home.

Daniel Rosenbaum for The New York Times R. K. Arnold, MERS president, said the company helped reduce mortgage fraud and imposed order on the industry.

“You don’t think that’s reasonable?” the judge asked.

“I don’t,” the lawyer replied. “And in fact, not only do I think it’s not reasonable, often that’s going to be impossible.”

Judge Logan had entered the murky realm of MERS. Although the average person has never heard of it, MERS — short for Mortgage Electronic Registration Systems — holds 60 million mortgages on American homes, through a legal maneuver that has saved banks more than $1 billion over the last decade but made life maddeningly difficult for some troubled homeowners.

Created by lenders seeking to save millions of dollars on paperwork and public recording fees every time a loan changes hands, MERS is a confidential computer registry for trading mortgage loans. From an office in the Washington suburbs, it played an integral, if unsung, role in the proliferation of mortgage-backed securities that fueled the housing boom. But with the collapse of the housing market, the name of MERS has been popping up on foreclosure notices and on court dockets across the country, raising many questions about the way this controversial but legal process obscures the tortuous paths of mortgage ownership.

If MERS began as a convenience, it has, in effect, become a corporate cloak: no matter how many times a mortgage is bundled, sliced up or resold, the public record often begins and ends with MERS. In the last few years, banks have initiated tens of thousands of foreclosures in the name of MERS — about 13,000 in the New York region alone since 2005 — confounding homeowners seeking relief directly from lenders and judges trying to help borrowers untangle loan ownership. What is more, the way MERS obscures loan ownership makes it difficult for communities to identify predatory lenders whose practices led to the high foreclosure rates that have blighted some neighborhoods.

In Brooklyn, an elderly homeowner pursuing fraud claims had to go to court to learn the identity of the bank holding his mortgage note, which was concealed in the MERS system. In distressed neighborhoods of Atlanta, where MERS appeared as the most frequent filer of foreclosures, advocates wanting to engage lenders “face a challenge even finding someone with whom to begin the conversation,” according to a report by NeighborWorks America, a community development group.

To a number of critics, MERS has served to cushion banks from the fallout of their reckless lending practices.

“I’m convinced that part of the scheme here is to exhaust the resources of consumers and their advocates,” said Marie McDonnell, a mortgage analyst in Orleans, Mass., who is a consultant for lawyers suing lenders. “This system removes transparency over what’s happening to these mortgage obligations and sows confusion, which can only benefit the banks.”

A recent visitor to the MERS offices in Reston, Va., found the receptionist answering a telephone call from a befuddled borrower: “I’m sorry, ma’am, we can’t help you with your loan.” MERS officials say they frequently get such calls, and they offer a phone line and Web page where homeowners can look up the actual servicer of their mortgage.

In an interview, the president of MERS, R. K. Arnold, said that his company had benefited not only banks, but also millions of borrowers who could not have obtained loans without the money-saving efficiencies it brought to the mortgage trade. He said that far from posing a hurdle for homeowners, MERS had helped reduce mortgage fraud and imposed order on a sprawling industry where, in the past, lenders might have gone out of business and left no contact information for borrowers seeking assistance.

“We’re not this big bad animal,” Mr. Arnold said. “This crisis that we’ve had in the mortgage business would have been a lot worse without MERS.”

About 3,000 financial services firms pay annual fees for access to MERS, which has 44 employees and is owned by two dozen of the nation’s largest lenders, including Citigroup, JPMorgan Chase and Wells Fargo. It was the brainchild of the Mortgage Bankers Association, along with Fannie MaeFreddie Mac and Ginnie Mae, the mortgage finance giants, who produced a white paper in 1993 on the need to modernize the trading of mortgages.

At the time, the secondary market was gaining momentum, and Wall Street banks and institutional investors were making millions of dollars from the creative bundling and reselling of loans. But unlike common stocks, whose ownership has traditionally been hidden, mortgage-backed securities are based on loans whose details were long available in public land records kept by county clerks, who collect fees for each filing. The “tyranny of these forms,” the white paper said, was costing the industry $164 million a year.

“Before MERS,” said John A. Courson, president of the Mortgage Bankers Association, “the problem was that every time those documents or a file changed hands, you had to file a paper assignment, and that becomes terribly debilitating.”

Although several courts have raised questions over the years about the secrecy afforded mortgage owners by MERS, the legality has ultimately been upheld. The issue has surfaced again because so many homeowners facing foreclosure are dealing with MERS.

Advocates for borrowers complain that the system’s secrecy makes it impossible to seek help from the unidentified investors who own their loans. Avi Shenkar, whose company, the GMA Modification Corporation in North Miami Beach, Fla., helps homeowners renegotiate mortgages, said loan servicers frequently argued that “investor guidelines” prevented them from modifying loan terms.

“But when you ask what those guidelines are, or who the investor is so you can talk to them directly, you can’t find out,” he said.

MERS has considered making information about secondary ownership of mortgages available to borrowers, Mr. Arnold said, but he expressed doubts that it would be useful. Banks appoint a servicer to manage individual mortgages so “investors are not in the business of dealing with borrowers,” he said. “It seems like anything that bypasses the servicer is counterproductive,” he added.

When foreclosures do occur, MERS becomes responsible for initiating them as the mortgage holder of record. But because MERS occupies that role in name only, the bank actually servicing the loan deputizes its employees to act for MERS and has its lawyers file foreclosures in the name of MERS.

The potential for confusion is multiplied when the high-tech MERS system collides with the paper-driven foreclosure process. Banks using MERS to consummate mortgage trades with “electronic handshakes” must later prove their legal standing to foreclose. But without the chain of title that MERS removed from the public record, banks sometimes recreate paper assignments long after the fact or try to replace mortgage notes lost in the securitization process.

This maneuvering has been attacked by judges, who say it reflects a cavalier attitude toward legal safeguards for property owners, and exploited by borrowers hoping to delay foreclosure. Judge Logan in Florida, among the first to raise questions about the role of MERS, stopped accepting MERS foreclosures in 2005 after his colloquy with the company lawyer. MERS appealed and won two years later, although it has asked banks not to foreclose in its name in Florida because of lingering concerns.

Last February, a State Supreme Court justice in Brooklyn, Arthur M. Schack, rejected a foreclosure based on a document in which a Bank of New York executive identified herself as a vice president of MERS. Calling her “a milliner’s delight by virtue of the number of hats she wears,” Judge Schack wondered if the banker was “engaged in a subterfuge.”

In Seattle, Ms. McDonnell has raised similar questions about bankers with dual identities and sloppily prepared documents, helping to delay foreclosure on the home of Darlene and Robert Blendheim, whose subprime lender went out of business and left a confusing paper trail.

“I had never heard of MERS until this happened,” Mrs. Blendheim said. “It became an issue with us, because the bank didn’t have the paperwork to prove they owned the mortgage and basically recreated what they needed.”

The avalanche of foreclosures — three million last year, up 81 percent from 2007 — has also caused unforeseen problems for the people who run MERS, who take obvious pride in their unheralded role as a fulcrum of the American mortgage industry.

In Delaware, MERS is facing a class-action lawsuit by homeowners who contend it should be held accountable for fraudulent fees charged by banks that foreclose in MERS’s name.

Sometimes, banks have held title to foreclosed homes in the name of MERS, rather than their own. When local officials call and complain about vacant properties falling into disrepair, MERS tries to track down the lender for them, and has also created a registry to locate property managers responsible for foreclosed homes.

“But at the end of the day,” said Mr. Arnold, president of MERS, “if that lawn is not getting mowed and we cannot find the party who’s responsible for that, I have to get out there and mow that lawn.”

Bank Fails to Rebut Satisfaction’s Validity Created By Notary’s Acknowledgment; FORECLOSURE DENIED! -Wells Fargo Bank NA v. Moise

ROBO-SIGNER

The trial court opinion was published in the New York Law Journal.

KINGS COUNTY
Real Property
Bank Fails to Rebut Satisfaction’s Validity Created By Notary’s Acknowledgment; Foreclosure Denied

Wells Fargo Bank NA v. Moise

Defendants seek summary judgment based on the fact that Plaintiff has not shown a valid assignment of the mortgage and note. 

Plaintiff originally submitted an assignment of the mortgage dated April 30, 2009. The assignment was signed by Yolanda Williams, Assistant Secretary of Mortgage Electronic Systems, Inc..  However, the notary public’s acknowledgement states that she witnessed and acknowledged the signature of Herman John Kennerty, whose name does not appear anywhere on the document. 

Plaintiff acknowledges that there was a mistake on the assignment and argues the mistake was de minimis not curat lex.  It also argues that the Court should simply replace the defective assignment with the correction assignment, and proceed with its action.  In fact, the error was not de minimis as the signature of the purported assignor was not acknowledged, rendering the assignment a nullity. 

 A simple typographical error can be amended, but a failure to properly acknowledge the signature of a person who signed the instrument cannot be. No affidavit is submitted either Yolanda Williams or the notary Lisa Rhyne explaining what the alleged error was or how it occurred. In fact, the so called “correction” assignment in fact is acknowledged by a different notary on a different date.

WELLS FARGO to some…HELLS FARGOT to OTHERS! Tenants of foreclosed places with no heat or hot water, with bugs, with ceilings falling down, with mold, that’s called a hole.

Little do these people know…these banks do not care one bit! They surely didn’t care to help the owners when they had it. Only until the complaints pour in do they attempt “Damage control”!

Come here and voice your anger! … Everyone mentioned sure does stop here daily.

 

By Eileen Markey

New Legal Push For Foreclosure Victims: CITYLIMITS

Tenants have a message for the bank that holds mortgages on 10 Bronx buildings that have gone into foreclosure and disrepair: You own it, you fix it.

Thursday, Apr 22, 2010

Tenants at 3018 Heath Avenue and nine other buildings in the The Bronx have had enough. After living for years with roaches, rats, sagging ceilings, broken plumbing and long stretches without heat or hot water, they are demanding the bank that owns their buildings make repairs. The city’s Department of Housing Preservation and Development lists 756 immediately hazardous C violations against the 10 buildings.

When you live in a place with no heat or hot water, with bugs, with ceilings falling down, with mold, that’s called a hole. People should live in a home,” said Yorman Nunez, a board member of the NorthWest Bronx Community and Clergy Coalition, which helped organize the tenants. “Wells Fargo is just letting this happen.”

Wells Fargo, and its special servicer LNR Partners Inc., control the trust that holds the mortgage on the buildings. 3018 Heath Ave. and nine other buildings, formerly owned by private equity backed investor Milbank Real Estate, went into foreclosure in March 2009. Since then, tenants have been unable to get repairs, and uncertain who is in charge. So on Wednesday Legal Services NYC filed a motion in the ongoing foreclosure proceeding, begging the judge to make the bank take care of the building and its tenants while the foreclosure process continues.

The tenants position was neatly summed up in a hand-lettered sign that read: “You lend it, you mend it.”

Elected officials underscored the point.

“The lender is now the owner. They have a responsibility to maintain these buildings,” said Bronx Borough President Ruben Diaz Jr. “If Milbank couldn’t pay their mortgage, the lender, which is now the landlord, has to step up to the plate.”

In addition to Diaz, tenants were joined by City Council Speaker Christine Quinn, City Councilmember Fernando Cabrera and representatives from U.S. Rep. Jose Serrano’s office.

Stepping into a foreclosure case to seek relief for tenants is a new legal strategy, said Ed Josephson, housing coordinator for Legal Services NYC. He is one of the attorney’s working on the case. The idea is to go straight to the bank that gave the mortgage–or bought it via a mortgage-backed security–to push for repairs.

“We know what will happen when we get into court,” he said. “Everybody is going to say that they don’t have any responsibility. They structure things on purpose to avoid liability. But the point is there will be a lot of pressure on all these banks to fork of the money because they created this disaster.”

The Milbank properties are only a handful of the hundreds of rental buildings in the five boroughs that housing experts say are teetering near fiscal collapse. Bought in the heady days of the real estate boom for far more than their rents could support, and leveraged with sky-high mortgages, the buildings are going into foreclosure. Tenants, meanwhile, are left in a lurch. The Urban Homesteading Assistance Board, which has been working on issues of over-leveraged buildings since 2006, released a seven-page list of buildings it said are at risk of default.

Quinn said she knows the Milbank buildings are not isolated disasters. “We are working closely through the distressed property taskforce and we will look at other buildings where this type of lawsuit makes sense,” she said.

A hearing on the motion is scheduled for May 10 in Bronx Supreme Court.

LNR Partners declined, through a spokesperson, to comment.

Wells Fargo Assignment to Deutsche Bank violation CC 1095, attorney in fact violation.

Via: b.daviesmd6605

The assignment Wells Fargo did for Deutsche Bank. Note on the assignment it says, ” Wells Fargo N.A. Attorney-in-fact for New Century Mortgage Corporation” — this violated California Civil Code 1095. It is suppose to say, “New Century Mortgage Corporation, by Wells Fargo N.A. as Attorney In Fact”

California Civil Code says Civil Code Section 1095 says, ” “When an attorney in fact executes an instrument transferring an estate in real property, he must subscribe the name of his principal to it, and his own name as attorney in fact.”
There is a case, Hodge v. Hodge, 257 Cal. App. 2d 31 (1967), which says that if this is not followed exactly, the transfer is void. And obviously the judge agreed (thank goodness).

They don’t have a power of attorney to go with this assignment either! In discovery they gave us one that was done three months after the assignment; and six months after the NOD.

Bank of America, Wells Fargo probably won’t pay income tax for 2009: THANKS TO TRAP…I MEAN TARP!

Bank of America, Wells Fargo probably won’t pay income tax for 2009

Annual reports suggest BofA and Wells Fargo won’t have to pay federal income taxes for 2009.
By Christina Rexrode
crexrode@charlotteobserver.com
Posted: Friday, Mar. 26, 2010

This tax season will be kind to Bank of America and Wells Fargo: It appears that neither bank will have to pay federal income taxes for 2009.

Bank of America probably won’t pay federal taxes because it lost money in the U.S. for the year. Wells Fargo was profitable, but can write down its tax bill because of losses at Wachovia, which it rescued from a near collapse.

The idea of the country’s No. 1 and No. 4 banks not paying federal income taxes may be anathema to millions of Americans who are grumbling as they fill out their own tax forms this month. But tax experts say the banks’ situation is hardly unique.

“Oh, yeah, this happens all the time,” said Robert Willens, an expert on tax accounting who runs a New York firm with the same name. “Especially now, with companies suffering such severe losses.”

Bob McIntyre, at Citizens for Tax Justice, said he opposes the government giving corporations such a break.

“If you go out and try to make money and you don’t do it, why should the government pay you for your losses?” McIntyre said. “It’s as simple as that.”

For 2009, Bank of America netted a $2.3 billion benefit related to income taxes, according to its annual report: It had a benefit of $3.6 billion from the federal government, and an expense of $1.3 billion that it paid to different state and foreign governments.

It’s not unusual for a company’s debt to the federal government to vary widely from its debt to state governments, as appears to be the case with Bank of America, said Douglas Shackelford, a tax professor at UNC Chapel Hill.

The federal government often offers more tax deductions than the states; for example, Bank of America wrote down its federal taxable income with credits from low-income housing and losses on foreign subsidiary stock.

Company tax returns aren’t public, so it’s difficult to say for certain how much a company pays to, or receives from, tax coffers in any year .

The bank’s $3.6 billion current federal tax benefit for 2009 came in a year when it lost $1 billion in the U.S., according to its latest annual report. For the previous year, when the bank had profits of $3.3 billion in the U.S., it listed a current federal tax expense of $5.1 billion.

Wells Fargo was profitable in 2009, with $8 billion in earnings applicable to common shareholders. But its tax payments were reduced because of Wachovia’s losses.

Wells netted an overall tax benefit of $4.1 billion in 2009. It got a benefit worth nearly $4 billion from the federal government, and another worth $334 million from state governments. It had an expense of $164 million in foreign taxes. Wells did record an overall income tax expense of $5.3 billion, but that was offset by the tax benefits of the Wachovia losses.

Tax breaks and stimulus

The topic of corporate tax breaks has gained buzz recently because of a provision in the 2009 stimulus bill, which allows companies to “carry back” their losses for 2008 and 2009 to the previous five years, instead of just the previous two years. Homebuilders and other industries that suffered big losses in 2008 and 2009, but made a lot of money in the years before that, stand to gain billions in refunds. However, the stimulus bill provision does not apply for Bank of America and Wells Fargo, because companies that received TARP loans are ineligible.

UNC’s Shackelford said the argument for carrybacks stems from the belief that it’s “arbitrary” that taxes are collected on an annual basis.

“There’s no reason we couldn’t collect them on a monthly basis or a two-year basis. Then your losses and gains would be offset over the period,” he said. “The carryback enables you to not be penalized because your losses got bunched in a different year from your gains.”

The stimulus bill provision, he said, was helped by business lobbying. “There’s an awful lot of companies that paid a lot of taxes in the 2004 period, then they lost a lot of money, and they went to their legislators and said, ‘Please help us,'” Shackelford said.

McIntyre, at Citizens for Tax Justice, co-authored a report in 2004 related to carrybacks, after the Bush administration expanded many corporate tax breaks. The report examined 275 of the country’s largest companies and found that nearly one-third paid no federal income taxes in at least one year from 2001 to 2003. The companies overall were profitable in those years, but took advantage of tax breaks.

“If you or I lose money in the stock market, we don’t get to carry back our losses to any significant degree,” said McIntyre. His group works on closing tax breaks for corporations.

“Getting a refund from the past, that’s just weird,” he added.

Read more: www.charlotteobserver.com/2010/03/26/1337021/billions-in-tax-benefits-for-banks.html#ixzz0jUTUfF0A