Confidential
Report Says Some Fannie Mae Execs Thought MERS Foreclosure Counsel
Were ‘Sacrificing Accuracy For Speed’
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A report prepared more than six years ago for Fannie
Mae’s Office of Corporate Justice by the law firm Baker &
Hostetler LLP after allegations of widespread fraudulent practices
engaged in, condoned, or ignored by Fannie Mae relating to
foreclosures of home mortgages contains a number of devastating
conclusions about Fannie Mae and MERS.
The report, first made public in a N.Y.
Times article today by Gretchen
Morgenson, was prepared by Baker & Hostetler after the law
firm was retained to conduct an independent investigation of
concerns expressed by Nye Lavalle, a Fannie Mae shareholder, about
several Fannie Mae business practices in connection with
single-family mortgages.
The firm “found evidence that false statements by
foreclosure attorneys are being routinely made in at least two
counties in Florida and appear to be occurring elsewhere.”
It added that “[i]t is axiomatic that the practice
of submitting false pleadings and affidavits is unlawful. With his
complaint, Mr. Lavalle has identified an issue that Fannie Mae needs
to address promptly.”
Then, in a striking paragraph, the report
discussed false statements in foreclosures involving MERS mortgages.
It pointed to “MERS' concession that false statements are
routine,” adding that that “does not appear to be isolated to
Florida. Other courts have questioned the accuracy of MERS'
pleadings.”
The law firm stated that “[a] review of reported
cases and pleadings reveal that MERS counsel are misrepresenting to
courts that MERS is the owner or holder of defaulted promissory
notes in at least 7 states.” Highlighting an issue that now has
come to figure prominently in mortgage foreclosure cases, the law
firm stated that “these cases could be indicative of a broader
problem within these states.” Then, it stated that,
“[w]hile Fannie Mae officials do not have a single opinion, some
officials believe foreclosure counsel are sacrificing accuracy for
speed.”
(MSFraud adds: Foreclosure
Actions in the Name of MERS Servicing Guide, Part VIII, 105:
Conduct of Foreclosure Proceedings Effective with foreclosures
referred on or after May 1, 2010, MERS must not be named as a
plaintiff in any foreclosure action, whether judicial or
non-judicial, on a mortgage loan owned or securitized by Fannie Mae.
In the case of Mortgage Elec. Registration Sys., Inc. v Lopez
, where after nearly 4 years of litigation, MERS finally obtained
judgment to foreclose it its name. The court wrote: "Plaintiff
(MERS) has established its entitlement to judgment of foreclosure and sale. That branch of the motion for leave to enter a judgment of foreclosure and sale is granted.")
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