Avi Frisch, Esq., an “of counsel” attorney to the nationwide foreclosure defense firm, Porter Law Center, is dedicated to providing top level legal representation to its clients. Attorney Frisch explains how to stop home mortgage foreclosure by using a mortgage foreclosure defense that challenges the standing issues and rules of evidence.
“It’s has become an everyday story which is all too real for clients that have come to us in New Jersey looking for help with stopping the foreclosure process. The highly publicized story about Kendra and Todd Parker trying to avoid foreclosure without missing a single payment is something that is unfortunately not unique,” says Frisch. He sees the Mortgage Electronic Registration System, known as MERS, at the root of the problem and uses foreclosure defense strategies that are designed to stop foreclosures in New Jersey.
According to an article by Yepoka Yeebo on 2/16/11 in the Huffington Post, the problems began for the Parkers when they discovered that their loan would no longer be serviced by the original lender, Metropolitan National Bank, but would be handled instead by PHH Mortgage of Mount Laurel, New Jersey. PHH Mortgage of Mount Laurel, N.J., is ranked eighth among America’s top 10 mortgage servicers by volume of loans serviced, according to a list compiled by Mortgage Servicing News. Bank of America and Wells Fargo top that list.
In order for lenders and mortgage services to be more profitable, they needed a way to move the vast amounts of mortgage documents and verifications from one lender to another. The problem was that to be able to legally transfer a mortgage, the paperwork had to be hand signed and filed with the local country clerk. Such documents are often referred to “acid documents” in the lending industry. Such a process, though cumbersome and tedious, has been a mainstay in American real estate law for centuries. The solution for creating a more efficient system came in the Mortgage Electronic Registration Systems, or MERS, Merscorp Inc., operator of the electronic-registration system which now contains about half of all U.S. home mortgages.
Lenders and servicers tried to argue that circumventing the established practice of providing original hand signed and “wet-ink” documents and going to an electronic registration system between banks was an acceptable practice and provided proof necessary to transfer a mortgage. However, it was recently ruled by a Federal bankruptcy judge that MER’s has no legal right to transfer the mortgages under its membership rules. Similar rulings have been passed down from courts in other states, most notably The Supreme Judicial Court of Massachusetts.
According to the Feb. 10 opinion of Bankruptcy Judge Robert E. Grossman in Central Islip, NY, in the case of Agard, 10–77338-reg in the U.S. Bankruptcy Court, Eastern District of New York, “MERS’s theory that it can act as a ‘common agent’ for undisclosed principals is not supported by the law. MERS did not have authority, as ‘nominee’ or agent, to assign the mortgage absent a showing that it was given specific written directions by its principal.” In short, a lender has no legal right to transfer mortgages using the MERS system.
For the Parkers, as well as our clients, it is important to note that circumventing the rules of evidence and not being the original lender are the foundations to a strong defense against foreclosure. We challenge the standing issues and rules of evidence. This causes the Plaintiff to lose the motion for Summary judgment based on failure of proofs. Homeowners need to be in a proactive state of mind in order to know their rights and make good choices about their options when dealing with banks. The banks have attorneys representing them and it just does not make any sense for a homeowner to try to save their home on their own. Don’t go to a gunfight with a knife! Talk to a seasoned attorney that specializes in foreclosure defense to find out what your options are.
