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Follow on Google News | Utah Attorney Walter Keane Uses Quiet Title Law to ByPass MERSUtah Real Estate Lawyer, Walter Keane, responds to questions regarding 1/15/2011 Salt Lake City Tribune Article entitled "How Accurate are Property Records?"
“Yes” this is justice. If you ignore black letter rules of law – like the mortgage industry did with creating MERS – you do so at your peril. I thought the banks were suppose to be smart; they are not. The law is against MERS. I will continue to nullify trust deeds and enforce the black letter rule of law for the benefit of my clients: the owners. --see PARTIAL Salt Lake Tribune article below-- FULL ARTICLE LINK: http://www.sltrib.com/ ____________________________________________________________ How Accurate are Property Records? By Tom Harvey The Salt Lake Tribune First published Jan 15 2011 07:04PM Updated Jan 16, 2011 11:55PM A Utah court case in which the owner of a Draper townhouse got clear title to the property, even though he still owed $132,000 on it, raises new legal and financial questions about a property-records database created by mortgage bankers. The award of a title free of liens means that whoever owns the promissory note on the Draper property — likely a group of faraway investors — no longer has the right to foreclose to collect on a delinquent loan. Indeed, the townhouse owner has sold the property and kept the money. Those who own the promissory note probably don’t even know what occurred. Decisions such as the one 3rd District Judge Glen Iwasaki handed down in the Draper case could have a big impact as the state wends its way through hundreds of lawsuits involving foreclosures, loans on properties for more than they’re worth and predatory lending practices that led Utahns to lose their homes as the real-estate bubble burst. — Quiet title » Last year, the owner of the Draper property contacted attorney Walter T. Keane to help him deal with lenders, though Keane won’t say what the problem was and the owner declined an interview request. Keane filed what’s called a “quiet title action,” a lawsuit in which the owner seeks clear title to a property free of liens by lenders or others. In Utah, when you take out a mortgage loan to buy a home, you sign a promissory note held by the lender and a deed of trust that is recorded at the county recorder’s office. The promissory note gives the holder the right to collect payments on the loan. The recording of the deed of trust gives the lender the right to foreclose on the property if you default on the loan. A trustee appointed by the lender also is recorded with the county and actually holds legal title to your property subject to the conditions of the trust deed. The lawsuit over the title to the townhouse named Garbett Mortgage and Citibank FSB as the holders of promissory notes as recorded on trust deeds filed with the recorder’s office. Integrated Title Services was listed as trustee of the Garbett Mortgage trust deed, while First American Title was the trustee of the CitiBank trust deed. — Trust deed tag-along » But there also was another entity listed on the trust deeds called the Mortgage Electronic Registration Systems (MERS). The Mortgage Bankers Association, the Washington, D.C.-based trade group that represents major mortgage lenders, created MERS in the mid-1990s. MERS is a database where promissory note owners are recorded, with MERS itself then listed on trust deeds at county recorder offices as the “beneficiary” The new arrangement greased the way for mortgages to be packaged together and sold to investors who were relieved of the need under the traditional system to record the true owner of the promissory notes and to pay the county recording fees, which average around $35. Attorneys charge MERS is largely an instrument to avoid paying fees every time a promissory note is sold and resold and eventually packaged with others and owned by group of investors. During the latter part of the real-estate boom, hundreds of thousands of subprime loans were packaged and sold using the MERS system. MERS has registered about 31 million loans, the company’s chief executive said in congressional testimony in November. CEO R.K. Arnold also said in a 2009 deposition that the system had saved its members an estimated $2.4 billion that would have gone to county governments. — Who’s the beneficiary? Normally, a trustee named in a trust deed has a legal duty in Utah to the entity that holds the promissory note and for fair dealing with the homeowner. But in the townhouse case, First American Title filed a response to the quiet title action saying that it had no idea who had the right to collect payments on the promissory note, nor did it admit to knowing any other basic information about the property. “The fact of the matter is First American Title doesn’t know who the beneficiary of the trust deed is and basically they disavow any interest in it,” Keane said. “It’s an acknowledgement [the recording system on this property is] a fiction, that they don’t have any real interest in it.” Garbett Mortgage also told the court it no longer held an interest in the property. Integrated Title never filed a response to the lawsuit but did withdraw as a trustee with the Salt Lake County Recorder’s Office. “Considering the owner of the property [the title companies who were trustees] failed to dispute the matter, and further considering that the original lender claims no further interest, the court nullified the trust deeds prior to setting any type of trial date,” Keane said. So in the four months that the process took, the owner was able to gain title and deny the owners of his loan the ability to foreclose on the property for nonpayment. That means the promissory note owned by investors may be worth far less than they paid for it because it is no longer backed by an asset. — Record reliability » MERS spokeswoman Karmelo Lejarde said MERS actually added reliability to the system of county recording offices. “Prior to the creation of MERS [when servicers routinely held the mortgage lien for the note owner], the information in the public land records was not accurate due to delays in recording assignments or missing assignments that never got recorded,” she said in e-mail that appears to be a boilerplate response to questions about MERS’ role in the nation’s property registration system. “With the MERS System, mortgage data is more accurate and title information more reliable. The MERS process creates accountability and transparency, helps keep costs low, reduces the risk of errors in record keeping and makes it easier to keep track of the lien if a loan is sold to other banks and investors.” ........................................................... SEE REMAINDER OF ARTICLE AT http://www.sltrib.com/ --------- Walter T Keane PC walter@waltertkeane.com 801-990-4422 2825 Cottonwood Pkwy Salt Lake City, Utah 84121 # # # Salt Lake City, Utah Real Estate Attorney & Broker with over 20 years experience in real estate. 5-Star online ratings. Member, BBB. Commercial and Residential Solutions, free consultations. Frequently quoted in SLC Tribune as foreclosure expert. Short sales, liens, property tax, eminent domain / condemnation, property tax appeals, land use development, real estate contracts, landlord / tenant disputes, short sales and more. End
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