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).