Our market leadership is a function of our amicus advocacy in key national cases and our work at the national level with leading public officials. Recent notable developments include:
U.S. Bank v. Ibanez and Wells Fargo Bank v. LaRace
In the spring of 2009, Marie McDonnell intervened in the now famous cases styled U.S. Bank v. Ibanez and Wells Fargo Bank v. LaRace. She submitted two expert reports to the trial court and a definitive Amicus Brief to the Massachusetts Supreme Judicial Court that revealed the fatal defects in the securitization of the Ibanez and LaRace loans that led the trial court judge to overturn these two foreclosures. Consumer advocates nationwide have praised Marie for her seminal role in these cases and nationally renowned bankruptcy attorney, O. Max Gardner III, credits her work as instrumental in winning a unanimous decision by the SJC upholding the trial judge’s decision.
The Audit of the Essex Southern District Registry of Deeds
More recently, John O’Brien, Register of the Essex Southern District Registry of Deeds in Salem, Massachusetts, commissioned McDonnell Property Analytics, Inc. to conduct a forensic examination to test the integrity of his registry due to his concerns that: 1) Mortgage Electronic Registration Systems, Inc. (“MERS”) boasts that its members can avoid recording assignments of mortgage if they register their mortgages into the MERS System; and 2) due to the robo-signing scandal spotlighting Linda Green as featured in a 60 Minutes expos? on the subject earlier this spring. With respect to transparency i.e., how often could we track the true, current owner of a given mortgage, we found:
– Using our forensic tools and methods (typically unavailable to the general public and registry staff), we were able to trace ownership to only 287 of 473 mortgages (60%).
– 46% of mortgages were MERS registered; and 47% were owned by the Government Sponsored Enterprises (i.e., Fannie Mae, Freddie Mac, Ginnie Mae), respectively. Typically ownership of these mortgages is highly obscure.
– 37% of mortgages were securitized into public trusts (as opposed to private trusts), which are typically more discoverable through use of forensic tools and high cost, subscription-based databases.
With respect to the integrity of the chain of title i.e., how valid (legal) are the assignments of mortgage that we examined, we found:
– Only 16% of all assignments examined are valid.
– 75% of all assignments examined are invalid and an additional 8.7% are questionable (require more data.)
– 27% of the invalid assignments are fraudulent; 35% are “robo-signed;” and 10% violate the Massachusetts Mortgage Fraud Statute (M.G.L. Ch. 266 §35A(b)(4).
– 683 assignments are missing, translating to approximately $180,000 in lost recording fees per 1,000 mortgages whose current ownership can be traced.
Henrietta Eaton v. Federal National Mortgage Association
On September 30, 2011, Marie submitted her second Amicus Brief to the Massachusetts Supreme Judicial Court in what may be the most important mortgage foreclosure case now before any high court in the country known as Henrietta Eaton v. Federal National Mortgage Association.
This case examines the defects in the business models of Fannie Mae and Mortgage Electronic Registration Systems, Inc. (“MERS”), an invention of the Mortgage Bankers Association that purports to make the recording of assignments of mortgage in the public land records unnecessary.
In her Amicus Brief, Marie not only points out the clash between MERS’ Rules versus Massachusetts General Laws governing the recordation of assignments; but she boldly steps forth and certifies the assignment that Monica Medina in her alleged capacity as Assistant Secretary of Mortgage Electronic Registration Systems, Inc. did record as fraudulent.
Oral arguments were heard by a full panel of the seven Justices of the SJC on Monday, October 3, 2011. Justice Gants, the second Justice to speak, squarely confronts Fannie Mae’s attorney with Marie’s findings and is quite visibly concerned that the Eaton foreclosure may be based on a fraudulent assignment.