Fulton Class Action Challenges Foreclosures
involving MERS
by: Sheryl Rosenblum & Matthew Cardinale
December 3 2010
Original source: Atlanta Progressive News
(APN) ATLANTA -- On October 15, 2010, a class action lawsuit was filed on behalf of foreclosed homeowners in Fulton County who had their mortgage title transferred to MERS, an entity that is alleged to routinely engage in the fraudulent recording of deeds, in Fulton County Superior Court.
The case is called Rollins vs Mortgage Electionic Recording Systems, Inc. also known as MERSCORP or MERS.
Dustin Rollins is an affected homeowner, who filed on behalf of himself and other similarly situated persons. David Ates is the attorney representing the class.
The judge is Melvin Westmoreland.
The lawsuit argues that MERS has no legal right to foreclose on the properties, because MERS is not a lender, nor is MERS a servicing agent.
The lawsuit also states that MERS is foreclosing, without having produced the mortgage note, which would show they have a right to foreclose.
Rollins v. MERSCORP Inc. is a class action suit, which accuses MERS of wrongfully foreclosing, based on the fact that MERS had no legal right to foreclose in the first place.
Rollins v. MERSCORP Inc. hopes to reverse the previously foreclosed properties, and if the lawsuit is successful, this could be a precedent for future lawsuits.
With Georgia being a non-judicial foreclosure state, the lawsuit is important because it brings an issue before the court which would otherwise not be reviewed by the court.
The lawsuit, however, does not include households who have not foreclosed, including those currently facing foreclosure. It does not address the overall title questions impacting all the homeowners with their home titles held by MERS, including those who have not fallen behind on payments.
The Fulton County class action lawsuit is just part of an onslaught of class actions lawsuits filed around the country.
An estimated sixty percent of mortgages in the US have MERS on title.
According to author Christopher L Peterson, MERS is a shell company, with few employees, that has no legal interest in our properties.
The lawsuit claims MERS is a foreign-owned company that is not registered as a Georgia corporation with the Secretary of State's Office.
The lawsuit claims MERS is wrongfully foreclosing on millions of homes, clouding the title, while avoiding millions of dollars in county recording fees.
As previously reported by Atlanta Progressive News, MERS was created for the purpose of making the transfer and sale of loans cheap and easy. Unfortunately, as Peterson states, this is not legal, and when one separates a loan from a deed, by eliminating the need to record transfers, this clouds the title, and destroys the legal tracking system, which has caused massive legal problems.
Up until a few years ago, people used to be able to go down to the county and trace the title of a property, but today it is nearly impossible to trace the title because of MERS.
MERS shareholders, board of directors, and members are some of the very entities, that received bailouts, and contributed to the current US economic crisis. MERS shareholders include organizations such as AIG, Bank of America, Chase Home Mortgage, CitiMortgage, Fannie Mae, First American Title, Freddie Mac, GMAC, HSBC Finance Corporation, Merryll Lynch, the Mortgage Bankers Association, and Wells Fargo.
Many of these same companies made billions by packaging risky mortgages, giving them AAA ratings, selling them for a profit, and then betting that the loans would default.
The MERS system was created to avoid recording fees, while they transferred these loans over and over, causing the current economic crisis.
As previously reported by APN, banks and financial gambling institutions were literally transferring mortgages via Excel spreadsheet.
Peterson claims MERS may have robbed counties across the US of millions maybe billions of dollars in past and future recording fees.
There is an epidemic of wrongful foreclosures, mortgage fraud, and countless homeowners are being thrown out of their homes, for no good reason.
Peterson warns those who are fortunate enough to pay off their mortgage, they may not have good title. For those who are paying their mortgages, they could be paying money, only to find out the entity they are paying to is not the legal noteholder.
These lawsuits may take years to settle. The companies are quickly seeking to lobby for the passage of federal legislation, to make MERS a legal way of doing business.
Meanwhile, county attorneys do have discretion to sue for past and current recording fees, and to make sure counties start receiving fees on all transfers.
Mortgage 'Modification' Called RICO Fraud
MARIETTA, Ga. (CN) - A homeowner claims Wells Fargo instructed her to stop making her monthly mortgage payments to qualify for its loan modification program, then foreclosed after she followed the bank's instructions. The class action seeks damages for RICO fraud, in Cobb County Court.
Lisa Smoak Reid claims the bank "lulled [her] into inaction by offering to work out options to resolve her delinquency, but failed to provide any means to do so, and has failed to provide the plaintiff with the amount of the deficiency."
Reid says a Wells Fargo representative told her on April 1 this year "to fall behind on her mortgage payments," to qualify for assistance programs. "Defendant Wells Fargo informed plaintiff that a modification was possible, but told the plaintiff that she had to be three months behind on her payments," the complaint states.
So, Reid says, "Plaintiff, upon the advice of the defendant's representatives, fell behind three mortgage payments and was in contact with defendant Wells Fargo, who told plaintiff to look on the website for assistance programs."
She adds: "On or about August 1, 2010, plaintiff regularly started to make payments on the property again."
In the meantime, she says, she "filled out the requested documentation [for mortgage modification] and sent it back to Wells Fargo."
Reid says Wells Fargo told her they had received her documentation, but never told her whether the bank accepted or rejected her request, "although they continued to draft payments from the plaintiff for differing amounts."
But the bank never told her "of the reasons for the different amounts of the bank drafts," and they never contacted her attorney about her request for modification either, Reid says.
Instead, the bank foreclosed, putting at risk her $50,000 in equity and the $60,000 she spent on renovations. It also "threatened to obtain a dispossessory order" unless she pays "an alleged deficiency in the mortgage note," but Reid says that bank never told her "how much she allegedly owes."
Reid wants an emergency hearing and injunction to stop the foreclosure proceedings and set aside the foreclosure permanently. She also wants $15 million in punitive damages for RICO fraud, breach of fiduciary duty, breach of contract and emotional distress.
She is represented by Frank Marquez with Belli, Weil, Grozbean & Davis of Atlanta.
Similar complaints have been filed, and continue to be filed, against banks across the United States.
Lisa Smoak Reid claims the bank "lulled [her] into inaction by offering to work out options to resolve her delinquency, but failed to provide any means to do so, and has failed to provide the plaintiff with the amount of the deficiency."
Reid says a Wells Fargo representative told her on April 1 this year "to fall behind on her mortgage payments," to qualify for assistance programs. "Defendant Wells Fargo informed plaintiff that a modification was possible, but told the plaintiff that she had to be three months behind on her payments," the complaint states.
So, Reid says, "Plaintiff, upon the advice of the defendant's representatives, fell behind three mortgage payments and was in contact with defendant Wells Fargo, who told plaintiff to look on the website for assistance programs."
She adds: "On or about August 1, 2010, plaintiff regularly started to make payments on the property again."
In the meantime, she says, she "filled out the requested documentation [for mortgage modification] and sent it back to Wells Fargo."
Reid says Wells Fargo told her they had received her documentation, but never told her whether the bank accepted or rejected her request, "although they continued to draft payments from the plaintiff for differing amounts."
But the bank never told her "of the reasons for the different amounts of the bank drafts," and they never contacted her attorney about her request for modification either, Reid says.
Instead, the bank foreclosed, putting at risk her $50,000 in equity and the $60,000 she spent on renovations. It also "threatened to obtain a dispossessory order" unless she pays "an alleged deficiency in the mortgage note," but Reid says that bank never told her "how much she allegedly owes."
Reid wants an emergency hearing and injunction to stop the foreclosure proceedings and set aside the foreclosure permanently. She also wants $15 million in punitive damages for RICO fraud, breach of fiduciary duty, breach of contract and emotional distress.
She is represented by Frank Marquez with Belli, Weil, Grozbean & Davis of Atlanta.
Similar complaints have been filed, and continue to be filed, against banks across the United States.
