2 AMICUS BRIEFS-ONLY 16% OF ASSIGNMENTS ARE VALID- McDonnell and Levitin -TWO AMICUS BRIEFS FILED IN HENRIETTA EATON

8/4/2019 2 AMICUS BRIEFS-ONLY 16% OF ASSIGNMENTS ARE VALID- McDonnell and Levitin -TWO AMICUS BRIEFS FILED IN HE

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Supreme Judicial CourtFOR THE COMMONWEALTH OF MASSACHUSETTS

NO.SJC-11041

HENRIETTA EATON,PLAINTIFF-APPELLEE,

v.

FEDERAL NATIONAL MORTGAGE ASSOCIATION & ANOTHER,

DEFENDANTS-APPELLANTS.

ON APPEAL FROM THE APPEALS COURT SINGLE JUSTICE

BRIEF OFAMICUS CURIAE MARIE MCDONNELL, CFE

Marie McDonnell, CFE

Mortgage Fraud and Forensic Analyst

Certified Fraud Examiner

Truth In Lending Audit & Recovery Services, LLC

P.O. Box 2760, Orleans, MA 02653

Tel. (508) 255-8829 Fax (508) 255-9626E-Mail: [email protected]

Website: http://truthinlending.net

Dated: September 30, 2011
mailto:[email protected]:[email protected]:[email protected]


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TABLE OF CONTENTS

TABLE OF AUTHORITIES ............................... ii

STATEMENT OF AMICUSINTEREST ........................ 1

STATEMENT OF THE ISSUES ............................. 7

STATEMENT OF THE CASE AND FACTS ..................... 8

SUMMARY OF THE ARGUMENT ............................ 10

ARGUMENT ........................................... 14

I. THE MORTGAGE CONTRACT CONTROLS. .......... 14

II. THE PIVOTAL ASSIGNMENT OF MORTGAGE THATPURPORTS TO TRANSFER THE EATON MORTGAGETO DEFENDANT GREEN TREE IS INVALID. ...... 19

CONCLUSION ......................................... 22

EXHIBIT A Fannie Mae Announcement 08-12, May23, 2008

EXHIBIT B Note, September 12, 2007

EXHIBIT C Mortgage, September 12, 2007

EXHIBIT D MERS Research Results

EXHIBIT E Assignment of Mortgage, April 22,2009

EXHIBIT F Robo-Signer Monica Medina, SouthernEssex District Registry of Deeds

EXHIBIT G The New Man at MERS, Bill BeckmannInterview

CERTIFICATE OF COMPLIANCE


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TABLE OF AUTHORITIES

CASES:

U.S. Bank National Association v. Ibanez and WellsFargo Bank, N.A. v. LaRace,

458 Mass. 637 (2011)..........................1, 7

STATUTES:

Massachusetts General Laws

Ch. 183.........................................17Ch. 185 67....................................18Ch. 266 35A(b)(4)...............................6

MISCELLANEOUS:

Blacks Law Dictionary, Sixth Edition, 1990..........19


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STATEMENT OFAMICUS INTEREST

I, Marie McDonnell, am a Mortgage Fraud and

Forensic Analyst and a credentialed Certified Fraud

Examiner. I am the founder and managing member of

Truth In Lending Audit & Recovery Services, LLC of

Orleans, Massachusetts and have twenty-four years

experience in transactional analysis, mortgage

auditing, and mortgage fraud investigation. I am also

the President of McDonnell Property Analytics, Inc., a

litigation support and research firm that provides

mortgage-backed securities research services and

foreclosure forensics to attorneys nationwide.

McDonnell Property Analytics also advises and performs

services for county registers of deeds, attorneys

general, courts and other governmental agencies.

I am the same Marie McDonnell who provided amicus

briefs to the Massachusetts Land Court and to the

Massachusetts Supreme Judicial Court in the landmark

cases U.S. Bank National Association v. Ibanez and

Wells Fargo Bank, N.A. v. LaRace, 458 Mass. 637 (2011)

in which the courts vacated two foreclosures


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prosecuted by trustees of securitization trusts.1 My

seminal contribution was to shift the debate beyond

defective assignments of mortgage to an examination of

the fatal breaks in the chain of title that occurred

due to the utter failure of the entities that

securitized these mortgages to document the transfers

between themselves.

More recently, John OBrien, Register of the

Essex Southern District Registry of Deeds in Salem,

Massachusetts, commissioned McDonnell Property

Analytics, Inc. to conduct a forensic examination to

test the integrity of his registry due to his concerns

that: 1) Mortgage Electronic Registration Systems,

Inc. (MERS) boasts that its members can avoid

recording assignments of mortgage if they register

their mortgages into the MERS System; and 2) due to

the robo-signing scandal spotlighting Linda Green as

featured in a 60 Minutes expos on the subject earlier

this spring.

1 McDonnells Amicus Brief is available on the

Massachusetts Supreme Judicial Courts website at:

http://www.ma-appellatecourts.org/search_number.php?

dno=SJC-10694&get=Search.
http://www.ma-appellatecourts.org/search_number.php?%20dno=SJC-10694&get=Searchhttp://www.ma-appellatecourts.org/search_number.php?%20dno=SJC-10694&get=Searchhttp://www.ma-appellatecourts.org/search_number.php?%20dno=SJC-10694&get=Searchhttp://www.ma-appellatecourts.org/search_number.php?%20dno=SJC-10694&get=Search


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I accepted this assignment on a pro bono basis

because of its high and urgent value to the public

trust, and to educate the 50 Attorneys General who are

brokering a settlement with the subject banks in an

attempt to resolve fraudulent foreclosure practices.

My entire report with exhibits is available at no

charge to the public at: http://salemdeeds.com and at

https://www.truthinlending.net.

I defined the scope of the examination by

selecting all assignments of mortgage that were

recorded during the year 2010 to and from three of the

nations largest banks: JPMorgan Chase Bank, N.A.,

Wells Fargo Bank, N.A., and Bank of America, N.A. The

sample was neither random nor arbitrary; we included

every assignment that appeared in the Grantor /

Grantee index using the registrys online search

engine. The study included 147 assignments involving

JPMorgan Chase; 278 assignments involving Wells Fargo

Bank; and 140 assignments involving Bank of America.

Before examining the documents, I enlisted the

help of Attorney Jamie Ranney of Nantucket,

Massachusetts to establish definitions of terms based

on Massachusetts law that I could rely upon to

determine whether an assignment was either: valid,
http://salemdeeds.com/https://www.truthinlending.net/https://www.truthinlending.net/http://salemdeeds.com/


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missing, questionable, invalid, fraudulent, or

criminallyfraudulent. These definitions are attached

as Exhibit A to my report; Exhibit B explains my

methodology, protocols and practical applications for

classifying assignments of mortgage according to the

prescribed definitions; Exhibit C is a list of robo-

signers that we identified which also provides

information on whom the robo-signors executed

documents for, who they were actually employed by (if

we knew), and how many documents they executed.

From there, we researched the underlying mortgage

and assembled all documents cross-indexed thereto such

as prior assignments of mortgage, discharges of

mortgage, orders of notice, and all documents recorded

in connection with a completed foreclosure. This

increased the population of examined documents to

approximately 2,000. In total, 473 unique mortgages

were analyzed, covering $129,577,415 in principal

obligations.

The results of my investigation were shocking and

revealed widespread, systemic, patterns of practice of

fraud and abuse by the mortgage banking and servicing

industries; and especially by their controversial

private utility, Mortgage Electronic Registration


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Systems, Inc. which has eviscerated transparency from

the time-honored public recording system, and so

defiled the integrity of the Southern Essex District

Registry of Deeds that John OBrien has called for a

full forensic audit of his registry.

With respect to transparency i.e., how often

could we track the true, current owner of a given

mortgage, we found:

Using our forensic tools and methods(typically unavailable to the generalpublic and registry staff), we wereable to trace ownership to only 287 of473 mortgages (60%).

46% of mortgages were MERS registered;and 47% were owned by the GovernmentSponsored Enterprises (i.e., FannieMae, Freddie Mac, Ginnie Mae),respectively. Typically ownership ofthese mortgages is highly obscure.

37% of mortgages were securitized intopublic trusts (as opposed to privatetrusts), which are typically morediscoverable through use of forensictools and high cost, subscription-baseddatabases.

With respect to the integrity of the chain of

title i.e., how valid (legal) are the assignments of

mortgage that we examined, we found:

Only 16% of all assignments examinedare valid.

75% of all assignments examined areinvalid and an additional 8.7% arequestionable (require more data.)


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27% of the invalid assignments arefraudulent; 35% are robo-signed; and10% violate the Massachusetts MortgageFraud Statute (M.G.L. Ch. 26635A(b)(4).

683 assignments are missing,translating to approximately $180,000in lost recording fees per 1,000mortgages whose current ownership canbe traced.

My audit of the Southern Essex District Registry

of Deeds is relevant here because Henrietta Eatons

situation is a case in point of what typically happens

when Fannie Mae, its Servicer, and Mortgage Electronic

Registration Systems, Inc. conspire to suppress the

identity of the true owner and holder of a borrowers

note and mortgage so that they can illegally foreclose

upon the collateral property without raising

suspicion.

My interest in offering this amicus briefis

simply to shed the light of the truth on the

documentary evidence available in the public record so

that this venerable Court will not be fooled by the

charade that is playing out before it now.

I offer my services herepro bono as a public

service. I have not requested, accepted nor received

any compensation for my efforts; nor do I have a stake


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in the outcome of the litigation except to see that

justice prevails.

STATEMENT OF THE ISSUES

1. The issue presented is the validity of aforeclosure conducted by a [successor] mortgagee who

[took the mortgage by assignment and purported to]

hold the mortgage but not the underlying promissory

note at the time of foreclosure.

2. A condition precedent to resolving issue # 1is to establish that the successor mortgagee seeking

to foreclose can prove that it received a valid

assignment of the mortgage from a party that itself

held the mortgage. If more than one transfer was

involved, the successor mortgagee must be able to

provide a complete unbroken chain of assignments

linking it to the record holder of the mortgage.2

3. If issue #2 fails, then issue #1 becomesacademic in nature with respect to the instant case;

however, the Supreme Judicial Courts ruling will be

of inestimable value to other matters that involve the

separation of the note from the mortgage due to

2SeeU.S. Bank v. Ibanez, 458 Mass. 637 (2011).


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securitization, the use of Mortgage Electronic

Registration Systems, Inc., or inadvertence.

STATEMENT OF THE CASE AND FACTS

Amicus Curiae McDonnell hereby adopts the

statement of the case and facts presented by the

Plaintiff-Appellee, Henrietta Eaton, in her Brief of

Appellee docketed with the Massachusetts Supreme

Judicial Court on September 23, 2011 in the instant

appeal.

However, also relevant to this case indeed,

essential are critical facts that arise upon an

examination of the assignment of mortgage recorded in

the Suffolk County Registry of Deeds on May 20, 2009

at Book 44958 Page 249 by which Mortgage Electronic

Registration Systems, Inc. as nominee for BankUnited,

FSB purports to assign and transfer to Green Tree

Servicing LLC all its right, title and interest in and

to the Eaton mortgage.

Simply put, if the operative assignment is shown

to be invalid, the issue of whether or not a mortgagee

who neither owns nor holds the note can foreclose on

the collateral property becomes academic in nature.

Moreover, if the assignment is invalid, the

foreclosure of the Eaton property would fail as a


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matter of law without having to consider the

splitting factor i.e., that the note and mortgage

are held by different entities.

Finally, if the assignment is invalid neither of

the Defendants, Green Tree Servicing LLC nor its

assignee Federal National Mortgage Association, have

the requisite standing to invoke the jurisdiction of

the Massachusetts courts.

Plaintiff-Appellee Eaton has pleaded her case

well both in the Housing Court, the Suffolk County

Superior Court, and before this Supreme Judicial

Court. She has properly cited Massachusetts common

law, the relevant statutes, and the terms of the

mortgage contract itself, all of which require

unification of the note and mortgage prior to the

institution of a foreclosure action.

The law of this case, which will ultimately

resolve issue #1, is well settled and does not require

the Supreme Judicial Court to pay deference to the

business models, innovations, rules and customs that

the mortgage banking industry has adopted which have

wreaked havoc of cataclysmic proportions throughout

all sectors of our economy and have had far-reaching


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effects on other sovereign nations and emerging

markets around the globe.

What is baffling here is that the Defendant-

Appellees who stand to profit from the instant

foreclosure are purposely suppressing the identity of

the real party in interest. This Honorable Court

should want to know, why is that? Whats there to

hide? Whats there to gain? And how does this tie into

the ever-increasing lack of transparency I quantified

after auditing the Southern Essex Registry of Deeds?

SUMMARY OF THE ARGUMENT

Amicus Curiae McDonnell hereby adopts and

ratifies the arguments, citations to relevant common

law, Massachusetts General Laws, and the operative

terms of the mortgage contract presented by the

Plaintiff-Appellee, Henrietta Eaton, in her Brief of

Appellee docketed with the Massachusetts Supreme

Judicial Court on September 23, 2011 in the instant

appeal.

Further, I argue below that not only does the

Eaton mortgage require that the Note and the attendant

Security Interest (Mortgage) be transferred together

when sold; but the policies and procedures of

Defendant-Appellant Federal National Mortgage


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Association (Fannie Mae) require that its Loan

Servicer hold both the note and the mortgage prior to

instituting a foreclosure action. Additionally, if

required by Applicable Laws, the Loan Servicer must

also gain physical possession of the note by

submitting a Request for Release of Documents from

Fannie Maes Document Custodian. . (See Exhibit A.

Fannie Mae Announcement 08-12, 5/23/2008)

Having an understanding of Fannie Maes policies

and procedures helps to explain why Mortgage

Electronic Registration Systems, Inc. (MERS)

functions as it does, especially when a MERS Member is

prosecuting a foreclosure action. However, as will

become apparent, Fannie Maes protocols and MERS

Rules are in direct conflict with the Massachusetts

General Laws governing foreclosure.

The pivotal Assignment of Mortgage (Assignment)

that purports to transfer the Eaton Mortgage from

Mortgage Electronic Registration Systems, Inc.

(MERS) as nominee for BankUnited, FSB to Green Tree

Servicing LLC (Green Tree) is invalid for a variety

of reasons explained in detail below.

Moreover, the purpose of this Assignment is not

to memorialize a true sale of the Note and Mortgage to


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the Assignee; but rather, it is a litigation tool

designed to close the gap in the chain of title so

that it appears in the public record that the

Assignee, Green Tree in this case, had the legal right

to foreclose the property. This sham Assignment is a

necessary precursor to the ultimate recordation of the

Foreclosure Deed; otherwise, Registers of Deeds would

not allow title to pass to the foreclosing entity.

It is incumbent upon consumers, their attorneys,

registry staff, clerks of court, and judges to learn

how to recognize these sham assignments because they

are corrupting the chain of title in our land records;

and because, once recorded, courts afford them

deference rather than seeing them for what they are:

counterfeits, forgeries and utterings.

The MERS System is no replacement for the time-

honored public land recording system that is the

foundation of our freedom, our prosperity, and our

American way of life. By privatizing property transfer

records MERS has been allowed to set up a control

fraud of epic proportions that has facilitated the

largest transfer of wealth in human history, and it

should be abolished.


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I have copious evidence that the MERS System

simply does not do what it claims to do. It is

incomplete, inaccurate, misleading, unreliable, self-

contradictory, and asynchronous with the timing of

events as they actually happened. Moreover, I have

witnessed that certain entries reflected in MERS

Milestone Reports appear to have been made during the

course of litigation in an attempt to square MERSs

internal records with the timeline of external events.

Indeed, the New Man at MERS, Bill Beckman was just

interviewed by Mortgage Technology Magazine and he

frankly admits: We did not have a robust process to

make sure that all the data on our system was

accurate, timely and reliable. Our view was that is

the servicers data and theyre relying on it for

their own transactions, theyre using their own

systems, so we dont have to double checkWell, the

regulators took the perspective of, No. Youve got

your name on it. Its your system. It is being used,

but you dont know exactly the way its being used, so

theres no reason those two things shouldnt line

up. (See Exhibit G. The New Man at Mortgage

Electronic Registration Systems, Inc., Bill Beckman

Interview)


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ARGUMENT

I. THE MORTGAGE CONTRACT CONTROLS.

On September 12, 2007, Henrietta L. Eaton

(Eaton or Appellee) executed a Note in favor of

BankUnited, FSB to obtain funds in the amount of

$145,000.00. The terms of the subject Note indicate

that the principal amount would be financed at a fixed

interest rate of 6.875% per annum; and that the

monthly installments of $952.55 beginning on November

1, 2007 would be sufficient to fully amortize the

obligation over the thirty (30) year term to maturity

by October 1, 2037. (See Exhibit B. Note,

9/12/2007)

To guarantee the debt, Eaton executed a Mortgage

encumbering residential property located at 141

Deforest Street, Roslindale, Massachusetts 02131

(Property). The Mortgage names BankUnited, FSB

(BankUnited) as the Lender and defined MERS as

Mortgage Electronic Registration Systems, Inc. MERS is

a separate corporation that is acting solely as a

nominee for Lender and Lenders successors and

assigns. MERS is the mortgagee under this Security

Instrument. (See Exhibit C. Mortgage, 9/12/2007)


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The Mortgage in question is what is known as a

MERS Original Mortgage (MOM) and is being tracked in

the Mortgage Electronic Registration Systems, Inc.

database as MIN #100526500053612901. MERS reports that

as of June 24, 2011, the status of the Eaton Mortgage

is Inactive meaning that the servicing rights and

the beneficial ownership rights in the Mortgage are no

longer being tracked in the MERS System. It also

indicates that Green Tree Servicing LLC was the last

Servicer of record and that Fannie Mae was the

Investor, i.e. owner and holder of the Mortgage Loan

at the time the Mortgage was deactivated. (See

Exhibit D. MERS Research Results)

A close reading of the Note and Mortgage clearly

indicates that the contract is between Eaton as

Borrowerand BankUnited as Lender. MERS has no

position in the Note and is not authorized to take any

action on behalf of the Lender under the terms

thereof. The Mortgage, on the other hand, provides

that MERS may take certain actions on behalf of the

Lenderif so directed by the Lenderor the Lenders

successors and assigns. The granting clause reads as

follows:


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This Security Instrument secures to Lender:(i) the repayment of the Loan, and allrenewals, extensions and modifications ofthe Note; and (ii) the performance ofBorrowers covenants and agreements under

this Security Instrument and the Note. Forthis purpose, Borrower does hereby mortgage,grant and convey to MERS (solely as nomineefor Lender and Lenders successors andassigns) and to the successors and assignsof MERS, with power of sale, the followingdescribed property located in the County ofSuffolk which currently has the address of141 Deforest Street, Roslindale,Massachusetts 02131.

There is no contractual language in the Mortgage

that gives MERS the independent right to enforce the

Note and Mortgage; or even to assign its position in

the Mortgage without the express direction and

authorization of the Lender or the Lenders successors

and assigns.

The Mortgage contains notice to the Borrower that

the instruments memorializing the mortgage obligation

may be sold; however, the clear representation made to

Eaton was that her Note and Mortgage, if sold, would

move together and remain inextricably linked. The

relevant section of the uniform covenants contained in

the Mortgage reads as follows:

20. Sale of Note; Change of LoanServicer; Notice of Grievance. The Note or apartial interest in the Note (together withthis Security Instrument) can be sold one ormore times without prior notice to Borrower.


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A sale might result in a change in theentity (known as the Loan Servicer) thatcollects Periodic Payments due under theNote and this Security Instrument andperforms other mortgage loan servicing

obligations under the Note, this SecurityInstrument, and Applicable Law. [Emphasissupplied]

Thus, irrespective of whether or not MERS is

involved in a nominal capacity, the Mortgage must

follow the Note pursuant to the strict language of the

contract between the parties. Notwithstanding MERS

overall scheme to avoid the recording of Assignments

in the public records, the Lender or the Lenders

successor and assigns are bound to do so under the

terms of the mortgage contract and all Applicable Laws

as explained further below.

Massachusetts General Laws Chapter 183 governing

the recording of documents in the county Registry of

Deeds does not specify when an assignment of mortgage

must be recorded. The presumption here is that all

assignees would want to record their position in order

to protect themselves from the risk of loss. While

auditing the Southern Essex District Registry of

Deeds, we came across numerous assignments that were

recorded as much as ten (10) years after the mortgage

had been discharged. Those were an obvious attempts to


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close the gap in the chain of title which stands for

the proposition that, eventually all valid assignments

must be recorded to maintain the integrity of title to

real property.

In contrast, M.G.L. Ch. 185 67 is explicit on

this subject and requires that all assignments

affecting registered land shall be registered. The

statute in its entirety states emphatically:

The owner of registered land may mortgage itby executing a mortgage deed. Such deed maybe assigned, extended, discharged, releasedin whole or in part, or otherwise dealt withby the mortgagee by any form of deed orinstrument sufficient in law for thepurpose.But such mortgage deed, and allinstruments which assign, extend, discharge

and otherwise deal with the mortgage, shall

be registered, and shall take effect upon

the title only from the time of

registration. [Emphasis supplied]

The clear statutory requirement codified in

M.G.L. Ch. 185, 67 establishes that all instruments

that assign the mortgage shall be registered. If

nothing else, common sense dictates that this

requirement carries over to recorded land as well;

otherwise, in a situation where a property consists of

an assemblage of both recorded land and registered

land, the result would be absurd i.e., the chain of

title to Parcel I would be different from Parcel II


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even though both lots were equally impacted by the

same transactions. This is not a hypothetical

situation as I have just completed an analysis of a

case involving this scenario.

II. THE PIVOTAL ASSIGNMENT OF MORTGAGE THAT PURPORTS

TO TRANSFER THE EATON MORTGAGE TO DEFENDANT GREEN

TREE IS INVALID.

Blacks Law Dictionary defines the term validas

having legal strength or force, executed with proper

formalities, incapable of being rightfully overthrown

or set aside Founded on truth of fact; capable of

being justified; supported, or defended; not weak or

defectiveOf binding force; legally sufficient or

efficacious; authorized by lawas distinguished from

that which exists or took place in fact or appearance,

but has not the requisites to enable it to be

recognized and enforced by law. (See Blacks Law

Dictionary, Sixth Edition, 1990, page 1550)

My examination of the Assignment of Mortgage

recorded in the Suffolk County Registry of Deeds on

May 20, 2009 at Book 44958 Page 249 by which Mortgage

Electronic Registration Systems, Inc. as nominee for

BankUnited, FSB purports to assign and transfer to

Green Tree Servicing LLC all its right, title and

interest in and to the Eaton mortgage revealed the


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following facts: (See Exhibit E. Assignment of

Mortgage)

1. The Appellants state in their Brief that,After the loan was funded, the Note wasendorsed in blank and transferred to FannieMae, which retained Green Tree to servicethe loan. [Appellants Brief, p. 4]

2. On information and belief, this transferfrom BankUnited to Fannie Mae occurred at ornear the origination date of September 12,2007.

3. Accordingly, BankUnited had no interest inthe Eaton Mortgage to transfer on April 22,2009.

4. Moreover, BankUnited had conveyed all righttitle and interest to Fannie Mae and couldnot sell the Mortgage for a second time toGreen Tree.

5. The Appellants admit that Green Tree was theLoan Servicer.

6. The Assignment of Mortgage in question wasexecuted by Monica Medina, AssistantSecretary of Mortgage ElectronicRegistration Systems, Inc. acting on behalf

of BankUnited, FSB.

7. Monica Medina is not an employee of MERS;and she was not employed by BankUnited on

April 22, 2009 when she executed thisAssignment.

8. In truth, Monica Medina is employed by GreenTree Servicing LLC at its headquarters inTempe, Arizona.

9. Thus, what we have here is a fictitious,self-dealing Assignment of Mortgage thatcontains false statements,misrepresentations, and omissions ofmaterial fact in order to deceive ordefraud. It was prepared and executed byGreen Tree without BankUniteds knowledge,authority or consent.


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10. This Assignment was not prepared for thepurpose of legally transferring the EatonMortgage to Green Tree. Rather, it is alitigation tool that was prepared underfalse pretenses to close the gap in the

chain of title to so that Green Tree couldprosecute the instant foreclosure, which itcompleted on November 4, 2009.

In preparation for writing this amicus brief, I

called upon Register John OBrien to search the

Southern Essex District Registry of Deeds filings for

other assignments that were executed by Monica Medina

(Medina). As of this writing, eleven (11)

assignments were provided to me for review. The

results are astonishing and clearly establish a

pattern and practice of assignment fraud. Medina

executed the assignments on behalf of ten (10)

different assignors in her dual role as a MERS

Certifying Officer or as Authorized Agent for Green

Tree. (See Exhibit F. - Robo-Signer Monica Medina)

In my capacity as a Certified Fraud Examiner, I

hereby certify to the Massachusetts Supreme Judicial

Court that the above-described Assignment of Mortgage

is fraudulent and therefore, it is void as a matter of

law. Thus, everything that flows from this breeder

document is tainted with fraud and must be revoked.


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CONCLUSION

In closing, I want the Justices to know that my

audit of the Southern Essex District Registry of Deeds

enabled me to examine 565 Assignments of Mortgage, the

majority of which were prepared in order to foreclose

on John OBriens electorate. Every single assignment

of mortgage that I examined that was prepared to

prosecute a foreclosure, without exception, is tainted

with the same fraud that I have detailed here.

The consequences to homeowners, the public land

recording system and the state and federal court

systems are devastating. In particular, the

Massachusetts Land Court is being used as the entry

point for these false documents as foreclosure law

firms introduce them with Complaints to Foreclose in

Servicemembers Civil Relief Act cases. The crisis is

so severe; it requires the immediate attention of the

Executive, Legislative and Judicial branches of the

Commonwealth of Massachusetts in order to protect its

citizens, its real property, and the rule of law.


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Respectfully submitted,

_____________________________

Marie McDonnell, AffiantMortgage Fraud and Forensic AnalystCertified Fraud Examiner, ACFEMcDonnell Property Analytics, Inc.P.O. Box 2067Orleans, Massachusetts 02653(v) 508-694-6866(f) 508-694-6874

Dated: September 30, 2011


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AMICUS BRIEF OF MARIE MCDONNELL

Henrietta Eaton v. Federal National Mortgage Association & Another

EXHIBIT A

Fannie Mae Announcement 08-12May 23, 2008


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EXHIBIT B

NoteSeptember 12, 2007


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EXHIBIT C

MortgageSeptember 12, 2007


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EXHIBIT D

MERS Research Results


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1 record matched your search:

MIN: 1005265-0005361290-1 Note Date: 09/12/2007 MIN Status: Inactive

Servicer: Green Tree Servicing LLC Phone: (800) 643-0202

Tempe, AZ

Investor: Fannie Mae Phone: (202) 752-7000

Washington, DC

Return to Search

For more information about MERS please go to www.mersinc.org

Copyright 2006 by MERSCORP, Inc.

S Servicer Identification System - Results https://www.mers-servicerid.org/

6/24/2011


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EXHIBIT E

Assignment of MortgageApril 22, 2009


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EXHIBIT F

Robo-Signer Monica MedinaSouthern Essex District Registry of Deeds


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ROBO-SIGNERMONICAMEDINA

ASS

IGNMENTSOFMORTGAGEEXECUTEDBYMONICAMEDIN

AANDRECORDEDINTHE

ESSEXSOUTH

ERNDISTRICTREGISTRYOF

DEEDS

Execution

Date

Effective

Date

Assignor

Assignee

MedinasPosition

MERS

McDonnellPropertyAnalytics,

Inc.

Page1

05/31/2011

11/01/200

9

MERSasnomineeforFirst

NationalBankofArizona

GreenTreeServicingLLC

AssistantSecretaryofM

ERS

YES

06/01/2011

04/01/200

9

MERSasnomineefor

Bankunited,FSB


VicePresidentofMER

S

YES

05/27/2011

12/02/200

9

MERSasnomineeforMortga

ge

Partners,Inc.



ERS

YES

05/27/2011

01/01/201

1

MERSasnomineeforFamily

ChoiceMortgageCorporatio

n



ERS

YES

06/23/2011

06/20/201

1

GreenTreeServicingLL

U.S.Bank,NationalAssociation,

astrusteeonbehalfofLehm

an

Capital,Inc.aDivisionofLeh

man

BrothersHoldings,IncasDe

btor

andDebtorinPossessionin

its

Chapter11caseintheUnited

StatesBankruptcyCourtfor

the

SouthernDistrictofNewYork,

CaseNo.08-13555

AuthorizedAgentofGreen

Tree

ServicingLLC

NO

07/10/2009

REOPropertiesCorporationby

itsattorneyinfactGreenTree

ServicingLLC

DBStructuredProductsInc

AuthorizedAgentofRE

O

PropertiesCorporationb

yits

attorneyinfactGreenT

ree

ServicingLLC

NO

10/21/2009

DBStructuredProducts,Inc.

by

itsattorneyinfactGreenTree

ServicingLLC

U.S.Bank,NationalAssociation,

asTrusteeintrustforthebe

nefit

oftheholderofSerVertisFu

ndI

AuthorizedAgentofD

B

StructuredProducts,Inc.byits

NO


59/115

ROBO-SIGNERMONICAMEDINA

ASS

IGNMENTSOFMORTGAGEEXECUTEDBYMONICAMEDIN

AANDRECORDEDINTHE

ESSEXSOUTH

ERNDISTRICTREGISTRYOF

DEEDS

Execution

Date

Effective

Date

Assignor

Assignee

MedinasPosition

MERS

McDonnellPropertyAnalytics,

Inc.

Page2

Trust2009-2Certificates,Se

ries

2009-2

attorneyinfactGreenT

ree

ServicingLLC

04/08/2011

MERSasnomineeforGMAC

MortgageCorporation

TheBankofNewYorkMel

lon

TrustCompany,N.A.asTrustee

forGMACMH

omeEquityLoan

Trust2006-HE3


ERS

YES

04/15/2011

MERSasnomineeforMortga

ge

LendersNetworkUSAInc

TheBankofNewYorkMellon,

TrusteeforCSMA2011-3,c/o



ERS

YES

05/25/2011

10/01/200

9

MERSasnomineeforGMAC

MortgageCorporation

TheBankofNewYorkMel

lon

TrustCompany,Nationa

l

Association,asTrusteefo

r

GMACMH

omeEquityLoanTrust

2006-HE3


ERS

YES

05/27/2009

MERSasnomineefor

BankUnited,FSB


AssistantSecretaryofMor

tgage

ElectronicRegistrationSys

tems,

Inc.asnomineeforBankUnited,

FSB

YES


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EXHIBIT G

The New Man at MERSBill Beckmann Interview


90/115

Vol.1

8,

No.

4September2011

Tech Savvy Lenders | .NET Framework | MMC Exams

mortgagetechnology.com

TOUGHQUESTIONSFOR

Bill Beckmann seeksto tackle challenges

MERS


91/115

PhotographyByRandallScott

12

MortgageTechnology

September2011

BILLBECKMANNBEGINSEACHWEEKWITHAFLIGHT

from

his

homeinSt.

LouistoWas

hington,D.C.ewee

k-

lyightshave

becom

earoutineofsortssince

hetookona

jobthatof

late,hasbecomeamongthemostdauntinginthe

mortgageindustry,presi

dentan

dCEOofMerscorpInc.

ecompany,locatedinthecapitalsubur

bofReston,Va.,

runsMERS,theMortgageElectronicRegistrationSystems.

ItsMERSSystemisadatabasethattrac

ksmortgageservicers

andcorrespon

dingpromissorynoteowners

for60%ofthe

nation

sresi

dentialmortgages.

Merscorpwascreatedan

disowne

dbythe

biggestplayers

inthemortgageindustry,includingthegovernment-spon-

sore

denterprisesan

dthenations

largestmortgage

len

ders

andservicers

likeC

iti,w

hereBec

kmannspent25yearsof

hiscareer,inc

ludingtimeservingasthepresidentofitsCiti-

Mortgageunitfrom2

005to2008.

ButMERSsro

leinthe

foreclosureprocess

hascomeun

der

re

from

borrowerad

vocatesan

dregu

lators,u

ltimately

lead-

ingtoaconsentorderissued

byfedera

lregulatorstwowee

ks

beforeBec

kmannshiringwasannounce

d.

InanexclusiveinterviewwithMortgageTec

hnology

his

rstwithanymediasincetakingthenewro

leBec

kmann

explains

how

hesleadingtheeorttoovercomeMerscorps

chal

lengesan

dw

hyh

ebelievesinthe

futureofMERS.

TheNe

wM

anat

ME

RS

ByAustinKilgore

MortgageindustryveteranBillBeckmann

sayshecanlea

dembattledMerscorp

throughitstoughtimes.

www.mortgage-technology.com

13


92/115

What compelled you to take this job?

I loved MERS for three

reasons. One is that its an interesting

company at a difficult time. I felt like I

could dive in and make a difference. And

I still feel that way; its proven to be true.

The second part is I really liked the

board. I liked that we have Fannie and

Freddie and the top lenders supportingthe company. Even though its a tough

time, you couldnt have a better board.

I figure that if I can help get through

the tough times, the ability to move the

company forward later with the backing

of a group like this would be incredible.

The third part, personally, I spent

25 years at Citigroup, a company with

250,000 people. By the end, I probably had

more bosses there than I have staff here.

The ability to be part of a small company

where I can walk down the floor and talk

to people instead of having to email orconference call, and work for a board of

directors which I had never done before,

was really just an interesting calling.

Having come from a MERS member, do

you feel you can relate to the members?

I understand it from the

other side. I supported MERS when I

was at Citi and I helped make invest-

ments in it. I understood its value propo-

sition. Coming into this, I had a basic un-

derstanding of how the members think

about it. That helps me day-to-day.

Equally important, having run a large

mortgage company, I understand the

broader perspective and I know many of

the personalities Im working with. They

can call me up if theyve got an idea or

problem, and I have the ability to reach

out and gain access to senior leaders dur-

ing the middle of a tough time is pretty

good and I think that helps us.

Q At Citigroup, we were a heavily regu-lated institution, especially during 07-08when the market started to turn. So I havea lot of familiarity and comfort working

with regulators, the OCC and OTS, and I

knew it was something new for this or-

ganization. So my ability to come in here

and feel like that with the right effort, this

is a solvable problem, was huge.

What stands out about what you know

now inside MERS that you didnt know before?

That MERS really is a

small company. Were up to 65 people

now, from 50 at the beginning of theyear. For something so important, with

60% market share in the U.S. of a back

office utility function for all the key play-

ers, it really is a small company.

There is some very focused expertise,

but its just not that deep. Our core func-

tions are done with outsourced vendors.

The key knowledge base is very concen-

trated and that was certainly a big dif-

ference. Im not sure I really understood

that when I was a member. I think this

is new, but I also didnt have as much

of an appreciation of how much effortmembers are spending on MERS.

Is that small size and concentrated ex-

pertise a strength or weakness?Its a little bit of both. One

of the reasons it was an appeal to me

coming here is that were small and nim-

ble. I dont have to go through a matrix

organization or a series of committees to

get stuff done. We have officers meetings

a couple of times a week and if we need

to make a decision, we can make it.

Even when I need to go to the board,

theyre very supportive. Theyre here to

make sure were staying on the straight

and narrow on the compliance order.

They meet monthly and I get stuff done

real fast. So in that sense, its good.

But its a challenge to go through pe-

riods of time, for example, like with the

consent order, where you have a large

amount of work come in all at once.

For example, weve now become a

vendor to our members and the vendor

management groups of eight to 10 of the

large banks want to come in and do a

vendor management reviews. Thats a

challenge when you have a small group.

But those are things you just have to

deal. There are peaks and valleys in any

business. Id submit that all the servicers

and banks are dealing with that capacity

issue and trying to get things lined up.

Thats one of the reasons I came here.

What are the other strengths of MERS?

I remain convinced morethan ever of the value proposition of the

business. While its been a under fire in

the press, the truth is bringing e-com-

merce to the process and eliminating un-

necessary recordings really is a positive

thing thats of value. Thats why despite

the controversy and compliance issues,

the members have stood behind us.

The board is phenomenal. If you added

up the market share of the board, its the

vast majority of the industry. Having that

group behind you and the expertise and

the resources behind them if you needhelp is tremendous.

The other thing that doesnt get talked

about is the connectivity. Were connect-

ed to Fannie, Freddie and all the mem-

bers. Were connected to LPS. We are the

de facto standard in terms of connectiv-

ity among all the different players. I think

thats something that as we go forward

and think about new opportunities

weve got to fix the challenges we have

in front of usbut as I think about the

future, the connectivity, the data and that

member support, taking it as a whole, it

really puts us in a unique position.

What are Merscorps biggest weaknesses?One is the fact that were

small. Were transitioning from almost

like an association to really a vendor of

Fortune 500 companies. Thats different

for us. We didnt have the support, infra-

structure, systems and process to do that.

14 Mortgage Technology September 2011


93/115

What do you mean by the difference be-

tween an association and a vendor relationship?

We view our role as sup-

porting the members activities. Thats

what we were formed to do and were

going to continue to do it well. One of

our challenges has been, in doing that, is

our name is on all those transactions.

Take one of the consent order re-

quirements. We did not have a robust

process to make sure that all the data

on our system was accurate, timely

and reliable. Our view was that is the

servicers data and theyre relying on

it for their own transactions, theyreusing their own systems, so we dont

have to double check. Theyre per-

forming those transactions, so theyre

performing it that way.

Well, the regulators took the per-

spective of, No. Youve got your name

on it. Its your system. It is being used,

but you dont know exactly the way its

being used, so theres no reason those

two things shouldnt line up.

So weve put in place a process now

that were going to make sure that

since we run a database, thats what

we do, its going to be perfect.

Its going to take a little while to

get there, but thats the process were

going through. Were going to have

a quality assurance function to make

sure it stays that way and all the otherprocesses supporting that are done

well. That wasnt something we did

robustly before and thats one of the

things weve been asked to do.

One of the other weaknesses we have

is that were a niche and complex busi-

ness. People dont understand us very

well. Were hard to understand and

that makes it difficult to get our mes-

sage out in a crisp and clean way and I

think that has hurt us a little bit.

As the foreclosures brought our

name into the forefront, people didnt

understand us. Weve become sort of

an easy villain because were a small

company, we dont have a lot of em-

ployees in all the states and were

owned by the banks.

Our name was on some of the fore-closures and because our name is

used by the servicers, we got pulled

into some of those other bad practices.

So thats been a weakness for us.

www.mortgage-technology.com 15


94/115

Candidly, one of the

weaknesses for us is we

didnt have a commu-

nications function. We

werent in the public eye

and the market started to

get ahead of us in terms

of characterizing what

we were and some of

our challenges before we

got in front to say, No,

thats not what we do at

all. Basically we just run

the database and do therecordings and were a

small organization and

we actually do that pret-

ty well. But some of these

other issues that we get

tied up into we werent

defending or explaining

very well. Thats a recent

weakness for us.

Is it possible to repair

the public image of MERS?

Its toughto repair because were

never going to be a

consumer company

and were not going to

be a household brand.

But what we can hope

to do and what were

trying very hard to do is add balance

to the story. Add a little bit of facts and

a little bit of balance.

For example, some of the legal deci-

sions that are out there and some of

the things that have challenged the

MERS business model. We can give

pages and pages of citations that show

were winning 95% of the time. But

what you see is the smaller ones.

Weve really gotten to the point that

were going to put out there every time

we win. Were going to continue to do

the press releases, not necessarily to say

that were better or something else.

So when that next ar-

ticle comes out, hopefully

well get the phone call

to be able to explain that

while this is an adverse

decision, it hasnt changed

the business model. The

business model has 10

positive decisions for that

one negative decision.

What we have done is

brought on professional

help and some back-

ground help. Were go-ing to get our messages

tighter and crisper. Were

going to be a little more

proactive and react to the

stories that arent right.

But were not hoping

to turn ourselves into a

household name.

Is there relationship

repairing that needs to happen

with the MERS members?

Absolutely.But I think weve done

that pretty well. A few

things have happened

that help us there. The

company has reconstitut-

ed its boards since the be-

ginning of the year. Most

of the key industry players are now on

the board and that has helped us a lot.

Theyre paying more attention to us.

At least once a month, I personally

get on a call with members and go over

the state of MERS and allow them to ask

questions. The same thing happens from

a legal basis. They get a steady stream of

communications from us.

Weve done a pretty good job of en-

hancing communication with members

because they read the same stories that

everybody else reads. They need that

continuous stream of communication

from me and theyre getting that.

What about defending MERS to the

judges, attorneys and others in the legal circle?

On a specific legal case,

theres not much we can do. You have

to go by the facts and circumstances of

the case. We the members are going to

put up a robust defense and to the ex-

tent that theres an outcome thats differ-

ent than others or that we dont like, well

continue to fight that in the courts.

So far, weve been successful. Where

weve had certain things that have gone

against us, nothing has been a full and

final judgment. Were still on appeal onthose that we dont like and we continue

to get some good decisions.

One of our key challenges has been

making sure the lawyers out there fight-

ing on behalf of MERS get the story.

There is an absolute critical need for us

to explain how to defend things.

Part of our plan this year is a very ro-

bust communication with members and

their legal counsel. We have biweekly

calls with our members counsels. We put

out monthly litigation reviews. We put

out quarterly case law studies. Were alsoin the process of putting together propri-

etary litigation management tools. Weve

held calls between our outside counsel

and the members outside counsels to

share some of the strategy there.

The natural follow on to that is when

you talk about an attorney general or a

state legislature. Thats where the educa-

tion about what MERS is, why we do

what we do and how its getting better

really makes a big difference.

One of the key things has been elimi-

nating foreclosures in MERS name. Thats

been a lightning rod for a lot of people

because it created customer confusion.

The consumer doesnt understand who

MERS is, even though its buried in their

contract. By maintaining the relationship

with the servicer, really then the focus is

on does MERS have a legitimate right to

assign? By and large, we feel weve had

pretty good success defending that.

SPOTLIGHT ON

BILL BECKMANN

Prior to becomingpresident andCEO of Merscorp,Bill Beckmann wasmost recently thepresident of hisconsulting firm, Beck-mann Insights. Beforethat, he was presidentof CitiMortgage from2005 to 2008. In his25-year-long tenure atCitigroup, Beckmannheld various roles,including president ofthe real estate servic-

ing and technologygroup and chairmanand CEO of its Stu-dent Loan Corp.



95/115

Youre describing changes that focus a lot

on Merscorps public message, which critics could

dismiss as merely PR spin. What are the actual

substantive changes that need to happen?

Its a balance depending

on the audience. Were not dealing with

a consumer ad campaign here where it

can be all spin and catchy. Were dealing

with a sophisticated audienceattorneys,

judges, legislators and candidly, some

cynical reporters. It has to be balanced.

It doesnt mean that were not going to

put a positive edge or spin on things. But

if its not balanced, if it doesnt explain fac-tually who we are and what we do and

the context of why our position makes

sense and perhaps another doesnt, then

were not going to have credibility.

But when do you actually start doing

what youre talking about? You can say youre

improving, that quality assurance is getting better

and youre addressing items in the consent order,

but that takes time. When does the message actu-

ally start conveying real accomplishments rather

than how you position your message?

In some ways, the consentorder was good for MERS and the mem-

bers. The reason is it really added focus,

attention and resources to a part of the

business thats getting a lot of attention.

What I like about the consent order is

that it isnt just that MERS was told to fix

its process; the members were told to fix

theirs. Its a hand-in-glove approach.

Whats great about this is the members

now have made a commitment that said,

If were going to use MERS, were going

to treat them as a vendor with the same

high standards we treat other vendors of

a Fortune 500 bank. Were going to treat

them with the same data security reviews.

Were going to reconcile our data.

So its not MERS thats reconciling the

data to make sure their system of record

is right with the MERS System. Theyre

doing it every month and we just now

have to check periodically that we agree

with the results theyre coming up with.

They have to have a MERS QA plan.

Our QA plan isnt a unique plan. Our QA

plan is testing the QA plans of the mem-

bers. Theyre really meant to fit together.

What we have in terms of the consent

order, were really going to end up much

stronger as an organization and the rela-

tionship with us and members in feeling

confident that the processes and the pro-

cedures and the data is all good.

Do you think its fair for people to ask

why that wasnt in place to begin with?

Yeah, sure. I think its fair. Ithink the answer is the organization grew

up over a period of 15 years and it was

never questioned, much in the same way

I think that some of the robustness of

servicing processes at servicers got ques-

tioned when they got put under stress.

The process worked for a long time

and when it was put under stress, people

said, Look, thats just not good enough

for the world we live in now. It has to

stand up to a different level of scrutiny.

MERS had never had a regulatory visit

before last year. When they came in, theydidnt say, What you did was terrible.

If anything, the regulators got con-

vinced that we do has value. But they

said, If its going to have value and

youre going to use it, it has to meet these

criteria because youre a critically impor-

tant back office function to banks. Weve

never been held to that standard before.

So its a legitimate question, although

what I would say is that servicers were

not necessarily operating off of the

MERS database. They were operating off

their own databases. I dont think this

was causing bad outcomes to consum-

ers or anybody else. I just think it was

a looseness in the process that subjected

us to criticism, which can be fixed.

Going back to the consent order, where

do we stand on that? Weve really made

enormous progress. The boards have

been reconstituted. The management

team has largely been reconstituted.

At the senior management level, weve

brought on a head of communications,

a new CEO, a chief risk officer and head

of HR in the past four months. Beneath

that, we brought in a new person to run

our quality assurance function and a

new person to run IT.

Thats a second bucket of what the

regulators were looking for so well have

more strength and oversight at the senior

level. Beyond the board and manage-

ment, weve really enhanced the whole

QA and data integrity processes.

Our defense has never been in anyof these court cases or even in the cases

of public appeal that its OK that we

did something wrong and were going

to do it better tomorrow. Weve always

felt and still feel today that the ground-

ing of the MERS business model is cor-

rect and lawful. What were doing right

now is more supporting the infrastruc-

ture that stands behind that.

One of the key things, if theres one

thing that makes me really feel good

about all the challenges that weve had

and fixing the regulatory issues andthese legal cases, is if you look at the

business and the business model as it

stands today, MERS has the same mar-

ket share that it did a year ago. Were

still operating in 50 states. We havent

lost any of our members. We havent

lost a nickel to an adverse judgment or

award. So the business model that we

have put in place here has really con-

tinued unfettered through the regula-

tory and legal challenges.

But that doesnt mean we havent

had to change some of the processes.

In Michigan, we lost the appeal on fore-

closure by advisement. For now, at least,

thats a way we cant do things. Well we

werent planning on doing things that

way anyway. We were already moving

out of foreclosures in our name. We

have had to adapt, but in terms of the

core business model and our value to

customers, thats continued strong.



96/115

Is the MERS System still a viable

component of the mortgage industry?

Whats the alternative? Is

the alternative to go back 20 years and

start recording these things on paper

again? There is no good alternative.

MERS was formed for a valid purpose.

There were challenges with the accu-

racy, timeliness and cost of paper-based

recording. None of that has changed, so

that value proposition is as true today as

it ever was. I would even argue its more

true today. While the securitization mar-

ket has slowed down a little bit, lendersneed more flexibility rather than less in

where loans can be disposed of.

Take Citi. There was a time when we

would originate a loan and say this is a

Citi loan, its going to go into Citis ser-

vicing and stay on Citis books or stay in

a Fannie/Freddie securitization forever.

Then all of a sudden, times got tight and

we had to start deciding whether we

wanted to sell off loans or sell off servic-

ing. I think having that flexibility you get

using MERS is perceived as more of a

value, not less, than ever before.Yes, there have been some challenges

to the governance related issues at MERS,

but were fixing those and the underlying

business model hasnt changed at all. If

anything, its more important than ever.

Recording officials who are critical of

MERS, like Massachusetts John OBrien Jr.,

believe the problems of 15 years ago have been

addressed with e-recording and other technology

that enables them to handle a large volume of ac-

tivity without MERS. Meanwhile, the industry

is experiencing a decline in new originations and

securitizations, so fewer loans are being recorded.

Why not phase out MERS?

The OBriens of the world

are talking about the way theyd like the

world to be, not the way it is. The idea

of going to 50 different state processes

for recording every assignment is a huge

step back. It doesnt make sense. Theres

no analogy for it in modern commerce.

When you think of the mortgage in-

dustry, its one of the more robust finan-

cial transactions and financial-intensive

industries in the country. And yet every

other industry has adopted e-commerce

and standardization as a way of doing

business. This hasnt yet.

The property recordings were never

meant to be a robust source of consumer

information. Theyre not today and they

werent before MERS existed. If MERS

wasnt here, they still wouldnt be. Its re-

cording a lien between two commercial

counter parties. This concept that if youhad recorded all the assignments, con-

sumers would know who their true own-

er and servicer are isnt the case. The note

isnt recorded, so it wouldnt have solved

the issues people are bringing up.

Theres also the cost piece of it. Record-

ing all of these interim assignments that

arent required by law, would add cost

to the mortgagee that isnt there today

which is passed down to the person in

the form of lower mortgage costs.

So first, youd have a rise in mortgage

cost. And second, people like OBrientalk about all the revenue that was lost.

Well, recordings were not supposed to

be a profit center for the state. Typically

a $35-$40 recording fee went to covering

the states costs. This is not a huge profit

center to the state that weve taken away,

nor is it clear that in the vast majority of

states, they could handle the volume.

But if recorders set lower fees based on the

expectation of handling multiple assignments

and then they dont generate that revenue because

of MERS, dont they have a valid argument that

the lost revenue impacts their ability to cover

costs? Do they have to raise their fees to generate

the same revenue from fewer recordings and as-

signments in order to cover expenses?

Why should they add

revenue for something thats adding no

value? Its essentially just a tax on the

mortgage that adds no substantive value

to the consumer or the industry.

The only reason to do that, if theyre

not increasing their costs, is as a tax

for the benefit of the state. So call it

what it is. Im not sure how that adds

value to the process or the transaction

or make the home buying process

more affordable. Its really not.

And as far as the information being

out there, anybody can come to our

website and get that information for

free in a lot easier way than having to

go down to the county courthouse.

How does the disparate level of tech-nological capabilities among recording offices

impact the viability of MERS?

There are thousands of

counties and each one of them has

their own processes. Some of them

are electronic. In that particular case,

it probably doesnt cost them that

much more for assignments and that

assignment might generate additional

revenue for that state. One could ar-

gue whether that should be a revenue

generation tool or a lower cost of as-

signment, but thats a policy question.But I will tell you its not universal

and the vast majority of the counties

have not invested in people or systems

to get that process done. Whether its

in a refinance boom or other cases,

you might experience backlogs.

But to ask the question in reverse,

why would we ever want to reinvent

the process thousands of times on a

local basis when youve got a national

answer that works and results in lower

costs for consumers?

You have something that works ef-fectively for 60% of the market thats

backed by the customers of that sys-

tem. The customers of the system are

not the individual homeowners and

theyre certainly not the county re-

corders. The customers are the per-

son whos got the lien and the person

whos got the note, and theyre both

pretty darn happy right now.

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If the critics who want these assignments

recorded arent considering the difficulty of man-

aging thousands of county requirements, is a bet-

ter solution to nationalize MERS and establish a

countrywide standard for land recording?

No. The answer could be

that. But I go back to why? Why are we

fixing something thats not broken? You

have two willing parties, the note holder

and the person who has the security in-

terest who are happy with this system.

They are all members with us. You

have a price that works for them, that

makes their business model work and itmakes it less expensive for them to offer

mortgages. Its offered nationally at scale.

So if you could nationalize it, do you

think the government could actually do

whats being done by a 60-person com-

pany for $13 for the life of the loan as re-

liably? Ive never seen an instance where

the government could take it over and

run it more effectively, more reliably and

with a higher customer satisfaction that

can be done privately.

What is the relationship of MERSwith land recorders?

We have a challenge ad-

dressing them because of the reasons

you said. Most local municipalities

and local regions are really pressed for

dollars right now and this is a place

where they would love to see more

dollars. So I get that.

But to the point of should this be done

nationally, I keep reading some of the

critics saying, Well who gave them the

authority to go do this?

We dont need the authority. Were

following the law. The law gave us the

authority. Thats why were following the

process. We have two willing counter-

parties who are happy to have it done

this way and it is part of the consumers

transaction that were going to do it this

way. Its not done in stealth, though Id

agree that its a few words in a fairly vo-

luminous and complex document.

I think we have a challenge with coun-

ty recorders because theyve latched onto

this concept of revenue and I think a mis-

guided sense of accuracy for information.

But if you go back to it, if MERS wasnt

here, note information would not be re-

corded. Fannie and Freddie assignments

would not be recorded and theyre the

vast majority of the mortgage industry.

Its not as if, as you read in the press,

that MERS has somehow shielded or

shadowed or made useless the hundreds

of years worth of county recording re-

cords. The world is different now than itwas 200 years ago.

I still think that part of our challenge is

both a little bit the press, but also, some

of the county recorders are still working

off the notion that somebody makes a

loan and they record it and it kind of

stays that way, where you should be able

to hang on to it through the trail at each

step. Thats a little bit different than the

way the industry works. The industry

moves at a fast pace. The note is moving

one way and the servicing rights may be

moving a different way and the actualservicing may be subserviced in a differ-

ent place. Its very complex.

The cover of the May issue of Mort-

gage Technology was MERS 2.0 vs. Life After

MERS. The story explored the debate over the fu-

ture of MERS. What do you think is the future?

Clearly, its MERS 2.0. Were

not done yet, but in terms of that vision

and model, I think were already there.

The reality is our board, Fannie, Fred-

die and the top servicers, in order to even

get to the point of us having a consent

order, the regulators looked them in the

eye and said, If you want to use this

company, you have to sign up for the

changes you need to do and they have

to sign up for the changes they need to

do to really make this work right going

forward. Are you willing to do that?

And they all said yes, we said yes and

the regulators bought in.

Weve been marching down that path

now for several months and our mem-

bers have started their reconciliations. We

started the process in July of doing some

independent reviews. Weve hired firms

to help us and weve hired staff here.

We understand what its going to take

to succeed in a world with a higher level

of scrutiny and discipline. And we know

how to do that. Thats one of the reasons I

came here. That parts not rocket science.

I still think we have to work our way

through the legal challenges and even

if we get through the legal challenges,there will be some legislative challenges.

There are some people who are going

to say even if it is legal, I dont like it; it

shouldnt be that way. Thats one of the

larger communication and education op-

portunities and to some degree, threats if

we dont do it really well, that exists.

I feel pretty good about the regulatory

piece. I feel good about the way the orga-

nization is moving and the support of the

boards and members. I feel pretty good,

not exceptional, but there are good days

and bad on the legal front. Even there,were getting a lot more wins than losses

and were OK. Were moving forward.

But I keep coming back to what is the

alternative? What is the life after MERS?

If this model doesnt work, there are only

two outcomes I could see.

One would be a nationalized approach.

Personally, I think thats nuts. Why would

you go that route when youre already

60% of the way there with something the

regulators and the constituents say is OK?

I know there are critics who dont say that,

Im very mindful of that. I see it every day

in the press and in other places.

The other alternative is going back-

wards again. Going backwards may

not be going back 15 years or 20 years,

maybe its only going back a few years

because some counties have come up to

speed and the ones who have come up

the fastest have the biggest constituen-

cies. But its very uneven.



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Why would you ever want to go back

to a situation where you have 50 people

inventing and investing in the same sys-

tems and different processes? That adds

cost and complexity to the process thats

going to get passed on the consumer in

the end. Its going to be harder to comply

to, rather than easier. So I really believe

this concept, not only do I believe in it, its

what were executing and doing today.

What is the state of the MERS eRegistry?

Were excited about the

eRegistry. Its kind of a natural evolutionfor a company like us. When I talked

about our strengths, the concept of bring-

ing e-commerce and having the large

backers and connectivity to the systems,

I think that all plays into the next gen-

eration, which is how do you take paper

out of the process, how do you help to

standardize things, and the eRegistry falls

naturally into that space for us.

That said, what Ive seen on customer

calls with six different organizations, ev-

ery one of them was asking about and

had an interest in the concept of e-notesand the eRegistry and how that might

help them from a couple of perspectives.

One is really getting paper out of the pro-

cess. The second is adding a bit of unifor-

mity to the process. Theyve all focused

on control and compliance given that

theyve been banged over the head so

hard with it. This actually adds, not takes

away control from the process. Then of

course, cost. They understand that theyre

going to be living in a world right now

with higher compliance costs and lower

mortgage volume for a while. So they

understand theyre going to be compet-

ing for a smaller piece of the universe.

So are servicers and originators seeing

the heightened regulatory environment as an

opportunity to make the shift to e-mortgages?

Theyre see it more as forc-

ing them to evaluate things that will give

them more control and lower costs.

Heres the flip side of that coin; despite

the fact that its a new product and had

been growing pretty quickly, weve also

seen the growth slow this year.

For the existing customers, its slowed

because the market has slowed. But there

also havent been a lot of new customers

joining. I think its for the understandable

reason that all the big guys and most of

the small guys have taken 100% of their

system and project resources and focused

them on the core business.

The eRegistry is one of our sweet spots

for future growth. Weve seen it growat a normal pace, but unfortunately for

us, not at the exponential growth wed

hoped for. In a way, thats good. It may

sound self-serving, but we needed the

time, too. I like to relate it to making sure

the foundation is good before we start

building additions on the house.

One of the lesser-publicized require-

ments in the consent order i