We Need to Review Court Cases and Regulations on a Case by Case Basis

We have to keep legal decisions and governmental regulations in perspective when we analyze a ruling or new regulation. There have been a lot of decisions on the validity of MERS for example. Many courts hold that it is invalid, while others hold that it is valid. To a lay person, this appears to be inconsistent. However, we must realize that the cases are reviewed on a case by case basis. The facts of the respective cases frequently determine the outcome. We also have to remember that these are different courts and different standards of review. In New York for example, it was a bankruptcy judge the ruled MERS invalid.

Another example of perspective is that there has been a lot of euphoria over the MARS situation relative to real estate agents. The FTC did not endorse real estate activity in these regard, it merely issued a stay of enforcement. There is a HUGE difference. This is likened to the police saying that they will not enforce speeding violations but it does not change the speed limit!! My opinion is that the FTC will review the events of the next six months or so and make a final determination.

I have also blogged about a lot of cases in regard to the “produce the note” defense. This week I blogged about Demucha v. Wells Fargo Home Mortgage. The case was a successful attempt to invalidate MERS because Wells could not prove that they had standing to foreclose (because the original assignment had not been “perfected”). Some courts within the same county make different rulings on this. In many instances, it is because the facts of a case dictate the outcome. It is also important to know when and how an issue was raised; was it an affirmative defense, objection to a Proof of Claim, Motion, etc.??

There are also tax issues such as the forgiveness of debt scenario that I have blogged about. These too must be viewed on a case by case basis because the facts of each case frequently determine the outcome.

We need to review Court Rulings and Regulations on a Case by Case Basis

Another Case Challenging the Validity of MERS

A week of acronyms...MERS....MARS! LOL California has had another significant legal decision regarding lenders and their ability (or inability) to produce original documents. After spending more than a year attempting to get a loan modification from Wells Fargo, one homeowner has decided to challenge the bank. In the case of MARK DEMUCHA v. WELLS FARGO HOME MORTGAGE , INC, the home owner is demanding to see the original documentation and paperwork. Mark Demucha, a resident of Bakersfield, California, describes spending more than a year of failed attempts to have his paperwork filed and a loan modification negotiated. However, he simply “filled out the same paperwork over and over again,” ultimately leading him to determine that if the lender had lost that important paperwork, maybe it had misplaced other documents as well. Now, he’s demanding that Wells Fargo prove it owns his home loan before he undergoes foreclosure. “They come to me and want me to have every single piece of paper I was ever supposed to have,” he says, describing how his requests to see his own promissory note are being met “like I’m a thief.”
Demucha originally borrowed the money for his home from CTX Mortgage, which sold the loan to Wells Fargo using the embattled MERS (Mortgage Electronic Registration System). As a result of using MERS, the transfer was not recorded in county record and the papers appear to have been lost in the shuffle. The suit has been dismissed several times and now awaits a new review. As yet, Wells Fargo has been unable to produce the promissory note.
The case went to the Appellate Division which ruled in favor of DeMucha. This is another case that is requiring lenders to be able to produce the original note and documents. Home owners are increasingly holding lenders accountable and this case is another chink in the MERS armor. MERS has been embattled (rightfully so) and this case further muddies the water on MERS. Last week, the Utah Appellate division determined that MERS registrations were valid.
For the apparent future, cases will be viewed on a case by case basis. The facts of each case are unique and it is important to not put too much emphasis on any one decision (with the exception of In Re Veal that I have discussed previously).

Another Case Challenging the Validity of MERS