another mers slapdown! the hooker case analyzed

8/6/2019 Another MERS Slapdown! The Hooker Case Analyzed

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However, it appears that the Big Banks Brain Trust ignored an essential fact that every first year lawyer knows real estate laws,

conveyancing laws, recording laws, and foreclosure laws, are all state-specific. One cannot simply open a book of federal regulations

and learn how to legally convey and foreclose real property. Rather, one must review the statutes of each state. Oregons laws could

be significantly different than, say, Floridas laws on the same subjects. So while the Big Banks and their lawyers focused on certain

national uniform laws, such as the Uniform Commercial Code, or the UCC, they ignored the real estate laws at the state level. Had

they checked Oregons trust deed foreclosure law, which was in existence long before MERS, they would have quickly noted that

recording ofalltrust deed assignments was a necessary condition.

ORS 86.735 came into existence long before MERS and the era of rampant securitization. During the easy credit boom years of

2005 through 2007, no one much cared about what the foreclosure statutes said; it was assumed that there would be never be a last

call at this party. But in the post apocalypse years of 2008 through today, people are starting to wake up to the fact that recording

of successive assignments is, in fact, necessary to nonjudicially foreclose trust deeds in Oregon.

Judge Panner quickly disposed of the banks argument that somehow MERS was a satisfactory substitute to public recording:

Defendants appear to argue that rather than requiring the recording of every assignment of the trust deed, the [Oregon Trust Deed]

Act allows defendants to instead track every assignment of the trust deed within the MERS system, recording only the final

assignment of the trust deed in the county land records. Because the Oregon Trust Deed Act requires the recording of all

assignments by the beneficiary, defendants' argument fails.

Although Judge Panner resolved the Hooker case on these narrow grounds, he didnt stop there. He also addressed the banks

argument, frequently made in other cases, that as a nominee of the beneficiary[i.e. the originating bank and all successive

assignees of that bank - PCQ]MERS had the authority to assign the trust deed itself. Heres what he said about that argument:

Although the trust deed lists MERS as the nominal beneficiary "solely as a nominee for Lender ...," ***, the deed makes clear that

MERS is not "the person for whose benefit a trust deed is given," ORS 86.705(1). Instead, the trust deed confirms that GN[the

lender, GN Mortgage LLC, who made the original loan and was named as the lender in the note and trust deed- PCQ]holds

the beneficial interest. The trust deed lists GN, not MERS, as Lender. ****[Emphasis mine. PCQ]

All payments on the loan are owed to GN, not MERS. *** GN, not MERS, may invoke the power of sale and any other remedies

permitted by Applicable Law. ****

While the trust deed lists MERS as the nominal beneficiary, the trust deed does not authorize MERS to take any actions on its own

behalf. First, MERS holds only legal title to the trust deed. *** Second, MERS acts solely as nominee for GN. *** Finally, MERS may

act as GN's nominee only "if necessary to comply with law or custom[.] ****[Emphasis mine. PCQ]

The trust deed emphasizes that MERS is not the beneficiary, but rather the nominee or agent of the Lender. Because the trust deed

clearly demonstrates GN, and not MERS, is the person for whose benefit the trust deed was given, GN (or its successor in interest) is

the beneficiary of the trust deed. ORS 86.705(1); see In re McCoy, 2011 WL 477820, at *3 (Bankr. D. Or. Feb. 7). [Emphasis mine.

PCQ]

[And in Footnote 2 of the Opinion] The note reinforces my conclusion that plaintiffs granted the trust deed for the benefit ofGN

, not MERS. The note states the trust deed protects the Note Holder from possible losses that might result if I do not keep the

promises that I make in this Note. ***GN , not MERS, is the "Note Holder." *** MERS is not mentioned in the note. [Emphasis

mine. PCQ]

Going beyond his narrow holding, but clearly sending a message to other foreclosing banks and foreclosure trustees, Judge Panner

let them know he gets it. Here are some of his observations, which, though not necessary to his finding in the Hooker case, were

interesting, insightful and on the mark:

"Although not affecting my conclusion here, the MIN Summary[MERS internal members-only record of the note andtrust deed transfers PCQ]raises an additional concern relevant to numerous cases pending before me. As noted above,

GN[the original lender PCQ]is listed as Lender on both the trust deed and the note. The MIN Summary, however,

makes no mention of GN. In fact, the MIN Summary is silent as to how or when Guaranty Bank[the original servicer of


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another mers slapdown! the hooker case analyzed

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