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Cobb Man Fights MERS Foreclosure

record-bee.com | September 17, 2014

COBB >> Nearly two-and-a-half decades after his father purchased property and began building a house in Cobb, Rob Somerton is unsure how much longer he will be its owner.

Somerton claims that Bank of America has been trying to foreclose on the house since 2011, using the Mortgage Electronic Recording System,or MERS.

The system is a national database of home mortgages that allows lenders to bypass county recorders to easily transfer mortgage rights. The system tracks mortgage loans and servicing interests, but it appears MERS may not be recording all additional mortgage assignments.

"They could foreclose in a month, or they can drag it out longer," Somerton said. "I really don't know."

There is a deed of trust on his home, though no documents indicating imminent foreclosure. He expects them, however, and he will stay until the end.

"I refuse to abandon the house my father built," he said.

Somerton and his wife moved into the house in 2001, having bought the house after his father died in 1996.

"He had liens on the property from state taxes," Somerton said. "The day before the house was going to be auctioned off, he committed suicide."

For the five years in between, Somerton rented out the house.

Since being founded in 1995, MERS has been a part of numerous lawsuits across the country, including cases in Nevada, Florida, Arizona, Minnesota, Kansas, Washington and New York. Through the system, which was created by the mortgage banking industry, MERS becomes the mortgagee of record for participating members.

In 2011, a deed of trust submitted by MERS was assigned and he claims a bank tried to foreclose on his home.

A deed of trust transfers a property's title to a trustee, which holds the title as loan security.

In 2014, a substitution of trustee was submitted, which was signed by a different party.

Both are "robo-signers," Somerton alleged. Robo-singers have endorsed the documents without reviewing details.

Eventually, after taking out a second mortgage and filing for bankruptcy twice to save the house, Somerton's wife left.

"She's renting an apartment somewhere else now because it got to be too much for her," Somerton said.

Somerton explained his situation to the Lake County Board of Supervisors (BOS) when they discussed MERS during their Aug. 26 meeting.

His life has been drastically changed by MERS, Somerton said.

During the Aug. 21 meeting, County Counsel Anita Grant said that the BOS does not have the authority to write legislation against MERS, but can encourage state legislators to look into the issue. Additionally, the county can conduct an forensic audit to determine if any fraudulent recordings have occurred. Individual property owners can files lawsuits.

"The difficulty is that in California, recording title assignments is not mandatory as it is in some states. Here, it is permissive," Grant stated. "An audit wouldn't be helpful for failing to record because they aren't required to record.

"It might be useful to uncover some other type of fraud," she added.

Since the initial discussion by the BOS, numerous county residents have come forward with their experiences attling banks and MERS.

Carey Calvanese told the board that she has MERS documents signed by a robo-signer.

The name, Linda Green, which was signed by multiple people, was at the nexus of a mortgage fraud controversy in 2011, which resulted in a $10 billion settlement.

"It affects a lot of seniors," Larry Anderson said. "What MERS is doing is proven fraud."

According to Anderson, Bank of America has been using MERS to foreclose on his house, as well as the houses of his neighbors.

Somerton, Calvanese and Anderson all demanded an audit of the county records.

"The thing is that they have recorded fraudulent documents, even though it isn't required in California," Somerton charged.

Complaints and legal action involving MERS have become increasingly common in California and around the country.

On Jan. 28, the Central California District Court dismissed claims made by MERS that it holds claim to the property of Daniel and Darla Robinson and must act as an agent for lenders, not for its own interest.

In June, the U. S. District Court for the Eastern District of Pennsylvania, Judge J. Curtis Joyner decided that MERS is "obligated to create and record written documents memorializing the transfers of debt/promissory notes which are secured by real estate mortgages in the Commonwealth of Pennsylvania for all such debt transfers past, present and future in the Office for the Recording of Deeds in the County where such property is situate" and that "the failure to so document and record is violative of the Pennsylvania Recording Statute(s)."

On Aug. 21, Bank of America agreed to pay a $16.65 billion settlement because of government accusations that the bank sold flawed mortgage securities running up to the 2008 financial crisis.

The settlement includes close to $1 billion in state claims, $1.03 billion in FDIC claims, $1.85 billion for fraud claims related to mortgage origination, $5 billion is for civil penalties to the Department of Justice and $7 billion is for consumer relief.

"Something has to be done about this," Somerton said. "It ruins lives. You can't imagine the anguish and stress something like this does to a person."

 

Back to September 2014 Archive

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