Dematerialized Mortgages

As foreclosure rates are now slowly but steadily ticking up, it is time to revisit securitized mortgages, this time with the context of David Rogers Webb’s work in the online book, The Great Taking, and movie by the same name. First, what The Great Taking tells us. Second, how it affects securitized mortgages and what you can do about it if you or someone you know is facing foreclosure.


Mr. Webb has done the world a service in showing how Wall Street has crept into state legislatures and amended each state’s Uniform Commercial Code (“UCC”) to separate owners of property from an enforceable legal title to their property. He calls this “dematerialization.” Although I believe the tacit threat related in The Great Taking–a complete confiscation of all privately held Western securities–may be overstated, the book and the movie are worth the time to read and watch because they show the details of a very real, intentional, systematic, and insidious threat to classical property rights that has been going on for decades. By shinining concious light on the dark details of the plot, Mr. Webb may have already foiled it. The details unfortunately show what people, so-called “elected representatives,” will do to their neighbors. The surreptitious changes to state and federal law represent what 21st century American “capitalist,” “democracy,” is mostly about. Trousered apes bribing other trousered apes to pass laws that will give them an economic advantage over their neighbor. There is hope, however, because, as Angelo Codevilla noted in 2010, however, the trousered apes represent an increasingly small, isolated, and desperate minority of the population who have a very tenuous control over the United States’ FIRE economy.

The crib note version of the book and movie is that over the last 30 years the bankster financializers have instructed every state legislature to make amendments to Articles 8 and 9 of its UCC. The changes transform what were formerly securities accounts that held actual property owned by real people into ephemeral, unsecured “entitlements.” That is, people who formerly owned discrete, identifiable securities now have only an unsecured claim to the securities that they believed they owned. Further, their unsecured claim is not to the security itself, but rather an asset pool that contains the security. Securities in the pool are represented not by paper certificates, but by electronic digits. In the event of the bankruptcy of an account holder’s broker or dealer (see Lehman Brothers in 2008), there may be multiple claims against the same pooled security. An individual account holder’s claim to the security that appeared on his account statement may be wiped out because of higher priority, secured claims. This is main risk created by the changes to the UCC.

Secured creditors and “clearing corporations” are now the apex predators on the revised UCC entitlement priority food chain. Regular account holders have been statutorily dispossessed and transformed into “entitlement holders” who, in the event of their broker-dealer’s bankruptcy, will be allowed to make a claim against that $630,000 share of Berkshire Hathaway A Series that they thought they owned. The middle men functionaries–brokers, dealers, and other financial institutions–are now pass-through entities called “security intermediaries.” The 2008 bailouts and the 2013 Cyprus banking “bail-in” (seizue of customer accounts) were beta tests for the new dematerialization regime.

At the same time, on the federal level, the first-priority secured creditors have been exempted from bankruptcy “preference” law. Bankruptcy preference provisions are designed protect a bankrupt business’ creditors, secured and unsecured. Preference law prohibits faltering and insolvent businesses from transferring funds and assets to certain “preferred” creditors over others while on the threshold (within 90 days) of filing for bankruptcy protection. The Great Taking points out that bankruptcy law changes over the past few decades now exempt secured creditors from preference law. The preference exceptions are called “safe harbors” for the secured creditors. What this means in practice is that if a secured creditor has reason to believe that its borrower is insolvent, it can immediately seize all of its secured assets from the borrower without worrying that a bankrupty court or trustee will interfere with the seizure. This is what JPMorgan did to Lehman Brothers in 2008–seized 8 billion of its assets.

Secured creditor safe harbors make legal and economic sense on some level–if a creditor wants to avoid getting stiffed it is wise to demand security/collateral. Strictly enforcing preferential transfer law against a secured creditor, however, simply takes assets from a wise lender and puts it in the hands of a bankruptcy trustee, essentially a federally licensed bill collector. Safe harbors in and of themselves are not, therefore, bad. Combined with the changes the state-law UCC, however, they substantially increase the risk to individuals and non-institutional investors who hold securities with a broker dealer. The Lehman Brothers case set an unseemly precedent and added unnecessary additional teeth to the safe harbor provisions by allowing JPMorgan to seize $8 billion in Lehman assets, including some assets that were not Lehman’s to pledge and security–the assets of its customers and account holders.

Mr. Webb thus accurately points out that the table is set in the event of a market collapse and any significant or widespread bankruptcy of broker dealers. The apex predator creditors have removed all legal barriers to quick asset seizure. In the case of a destabilizing market “event,” most securities account holders are thus between the pincers of: (1) not actually owning the securities in their accounts and having only an unsecured claim against them; and (2) the distinct possibility that a higher-on-the-food-chain secured creditor who has been provided a special exemption from federal bankruptcy law will expeditiously grab the account holders’ “dematerialized” securites from failing broker-dealers and banks before they have an opportunity to close and cash out their account.

Capping it off, there are the “central clearing parties” (“CCP”) who are also in the apex predator category. Mr. Webb points out that these entities were founded by CIA and CIA-adjacent operatives. CCPs include the Depository Trust Clearing Corporation (“DTCC”) which holds, ostensibly as a passive “nominee,” over 90 percent of all securities in the United States. In reality, however, it is not passive. In 2022 the DTCC froze Russian assets and blocked Russian access as a consequence of Russia’s movement into Ukraine. This we-make-the-rules-and-you’re-either-the-hammer-or-the-nail political bias in the Western financial system is no doubt why BRICS and the Global South have largely decoupled from the West.

Mr. Webb is therefore not the only person who sees the writing on the wall. Many outside the West, and many prudent wealthy people in the West, are in the process of opting out of the West’s fragile, centralized, and politically weaponized financial system. To the extent possible, they are rematerializing their assets and getting them out of unstable systems and high risk assets.

It all sounds a little scary, but again, because Mr. Webb has shined the light on the subject and put the issue into the public consciousness, I suspect that the threat will be significantly dissipated, if not averted. This is not to say that there won’t be a popping of the Everything Bubble or that many will not be financially hurt by it if it happens. But the rising price of gold and Bitcoin is showing that many people are on to the plot. The rising price of Bitcoin illustrates the same get-me-outta-here attitude as gold, although in my view buyers of Bitcoin ETFs are not fully conscious of the threat. The securitization of Bitcoin ETFs means that they will ultimately will be in the DTCC corral. The DTCC becoming a custodian and clearing agent for Bitcoin ETFs represents a potential threat to all hodlers. Of note, Larry Fink’s Blackrock’s Bitcoin ETF was originally listed and then abruptly delisted at the DTCC in the Fall of 2023.

The wealthy and wise are heeding Mr. Webb’s warning and doing what they can to rematerialize and localize their wealth. Because of The Great Taking, they are now aware of the risks of anything that could be captured or controlled by a legally favored apex predator like JPMorgan or the DTCC. Mr. Webb cites precedent for concern–the 1933 Bank Holiday which FDR used to shut down unfavored banks. All the banks’ liabilities–customer deposit accounts–were wiped out while the banks’ assets–loans and mortgages–were divvied up among the surviving, Fed-favored banks. Similarly, when the Soviet Union collapsed in 1991, its citizens woke up to their accounts being wiped out. When the dust settled, Larry Summers, Jeffrey Sachs, and USAID were at the table to help the hapless Russians figure out how to “reset” their system and pass the most precious assets to their favored oligarchs. No doubt there are those who have similar plans for the United States, including Larry Fink–who the late, great Charlie Munger warned us about.

Which brings me to today’s topic:


As many of my readers are aware, I was cancelled before being cancelled was cool. In the foreclosure crisis that followed the Great Financial Crisis, I tried, unsuccessfully, to prevent the 2008 Bailout Banks from fraudulently foreclosing on homeowners who were being removed from their homes based on what I now recognize as, thanks to Mr. Webb, dematerialized mortgages. That is, in the foreclosure crisis (and still today) homes were being taken by creditors who could not, if push came to shove, prove in court that they had the legal right to enforce the actual, material, property that gives value to the mortgage loan–the promissory note.

I was taken out of the game and my law license was suspended mostly because I was very naive. Although I had won the only quiet title action in the history of the United States that had succesfully voided two ostensiby “securitized” mortgages and had also consulted with one of the co-inventors of securitized mortgages prior to going after the Bailout Banks, I was lambasted in the press as the “Show me the Note!” kook and my very valid claims were called “frivolous” by the Bailout Banks’ Praetorian Guard–federal judges–before they fined me out of business. I naively expected to get some semblance of justice and fairness from a system under complete control of the Trousered Apes.

Yet I knew then and know now that a bank holding a securitized mortgage–even a properly securitized mortgage–has a difficult and probably impossble burden of proof.

I knew this in 2010 for three reasons. The first reason was because in 1995, as a very green lawyer, I was given a file to defend. My client was the First National Bank of Elk River (“FNBER”). FNBER was receiving screaming demand letters from a partner at the international law firm of Dorsey & Whitney, demanding that FNBER pay his client, Independent Mortgage Services (“IMS”), around $400,000 for two mortgages which the Dorsey partner claimed that IMS owned. His proof was two recorded assignments of mortgages from FNBER to IMS that were public records at the county recorder’s office. If anyone were to examine the title to the two properties in question, they would indeed discover two properly recorded and notarized assignments of mortgage from FNBER to IMS. From the public record it did indeed appear that IMS “owned” the seemingly very material mortgages recorded against the two properties. IMS’s problem was that every mortgage loan contains two parts–a promissory note (the valuable property representing the borrower’s promise to pay) and a mortgage (an agreement to give up the house if the borrower does not pay the note) and they had neither. IMS had only the public records to rely upon. When I received the FNBER v. IMS file, I did not know that I was about to become intimately familiar with the ancient, material, common law principle of “the mortgage follows the note.”

When I asked the executives at FNBER to explain the recorded mortgage assignments, they indicated that they had originated the two mortgages with the intent that they be sold to a securitizer—IMS. They closed on the loans and at the closing executed the mortgage assignments to IMS, with the presumption that IMS would purchase the loans as it had in the past. In these two cases, however, IMS’s underwriting department rejected these two loans and refused to purchase them from FNBER. The result was that FNBER retained the original promissory notes from the homeowners/borrowers and began collecting payments on notes. If IMS had not rejected the loans, then FNBER would have endorsed the promissory notes and transferred them to IMS who likely would in turn have transferred them to a bigger fish in the securitization pond. FNBER signed and recorded the assignments of mortgage based on the faulty assumption that IMS would purchase the original notes.

After a three day trial, we won. We won because FNBER’s witnesses came into court with the original promissory notes which IMS had rejected. We showed the court that FNBER had funded the loans and FNBER had been receiving payments on the loans since origination. FNBER paid value for and was in possession of the original notes, and, therefore, “owned” the notes. The evidence showed that IMS’s demand was a trying-to-get-something-for-nothing shakedown based solely on erroneously recorded mortgage assignments. IMS lost because it was unable to prove to the court that it was the note owner. Because it was not the note owner (the material asset in a mortgage loan), IMS had no right to the recorded mortgages (no right to take homes for non-payment of the note). The ancient, material, common law lesson: only a note owner can enforce a mortgage and take someone’s home. FNBER v. IMS is reported here.

The second reason I was aware of the shaky enforcability of dematerialized, securitized mortgages was because I had a good friend who was a partner at an international law firm who was one of the co-inventors of securitized mortgages. He had written a six-figure opinion letter for Goldman Sachs arguing in favor of the validity and enforceability of securitized mortgages in spite of the fact that the alleged owner of securitized mortgage—always a securitization trustee contractually immune from bankruptcy claims—was not a “holder in due course” of the note as that term is defined by the UCC. The securitization trustee is not a true “note owner” because it never pays any of its own value for the notes and is acutely aware of thousands of potential claims against the notes. These are the claims of the “mortgage-backed securities” (“MBS”) holders. The artifice of a bankruptcy immune (“bankruptcy remote”) securitization trustee was a novel idea that Wall Street loved because it meant risk-free reward for MBS investors. Many other Wall Street firms came to my friend offering to purchase his opinion letter. If a securities-issuing entity could hold an asset and be subject to no ownership risk–essentially appearing to the world of public records (see IMS above) as a “note owner” but in reality having only derivative, “nominee” rights–rights defined and subscribed by the securitization “pooling and servicing agreement” (“PSA”), then MBS sold by such an entity looked like a low-risk, high-reward bet.

After a long lunch with my friend in 2010, my experience in FNBER v. IMS, and observing the financial crime of the century–the 2008 Bank Bailouts–in real time, I did not believe that any securitization trustee, or any party to a PSA for that matter, could prove that it was “note owner” in a fair trial. My error was of course assuming that any homeowner would ever get a fair trial against a Bailout Bank.

The third reason I knew the banks would have a hard time proving note ownership in court was really intuition based on a number of anecdotes. I paid off a Citibank mortgage on my home in about 2002 and, when I asked for proof of the payoff in the form of a “Satisfaction of Mortgage,” what I received came not from New York–where I had send my request–but from some obscure, remote state and was signed something like: “By: Sally Smith, as Vice President of MERS.” Also, from 2008 to 2010 foreclosure clients had been coming in and, as I examined the publicly recorded documents, it became clear to me that a nationwide shell game was being played and the foreclosing lawyers were as clueless as anyone. The documents that appointed the lawyers to commence foreclosures–powers of attorney–initially were signed by the lawyers themselves. Then this stopped and the power of attorney appointments came from remote parts of the country, South Carolina, Utah, etc. When I skip traced the people doing the signing–in one case a woman by the name of “China Brown”–they disappeared and could not be deposed. When I deposed a lawyer who had commenced a foreclosure based on a China Brown-esque power of attorney, he came to the deposition drunk and confessed that he had no idea if the person who signed the power of attorney had any authority to sign it. He electronically received pre-prepared foreclosure files from his client and never questioned whether the person who appointed him to foreclose had the legal authority to do so.

All of these anecdotes, together with my lunch with the co-inventor of securitized mortgages, were confirmed when Georgetown Finance professor Adam Levitan testified before the U.S. Senate Banking committee on November 16, 2010. In his testimony, Mr. Levitan explained the reason for the fraudulent, no-nothing “robosigners” signing off on foreclosures. This was necessary because, in the process of securitization, the banks had followed the dematerialized digits and not the material law. The law that governs all securitized mortgages is trust law, state trust law. It is usually New York trust law, but sometimes Delaware and sometimes Washington D.C. trust law. Whatever the case, all trust law requires that the assets of the trust–in this case the original promissory notes signed by the original homeowner/borrower–be physically transferred and delivered to the trust prior to the closing date of the trust because the trust must “own” the notes in order for the MBS to have value. If the trust never took physical possession of the material notes, then it never became the “owner” of the note. As FNBER v. IMS and centuries of common law inform us, only the owner of the note can foreclose on a mortgage. Anyone foreclosing a loan that was not properly securitized is committing a fraud on the homeowner and the public title records. Professor Levitan told the U.S. Senate what I suspected–that Wall Street had systemically failed to properly securitize as many as 62 million notes and therefore 62 million mortgages were unenforceable.

After reading Professor Levitan’s testimony I was emboldened because I knew that, if what he was saying was true–and it was confirmed by the thousands of “China Brown” documents I was seeing–then no Bailout Bank could prove that it was a “note owner” and therefore no bank could take anyone’s home. At best, they could show that they did have some, unclear, rights in the note but could not foreclose the mortgage because they were not “holders in due course” of the notes; that is, they were subject to all claims and defenses that the homeowner and anyone else had against them.

When the truth is told about securitized mortgages, the facts will show that the vast majority of banks claiming to own securitized mortgages, if not all of them, are actually unsecured creditors. Unsecured creditors do not have the power to take anyone’s home and generally settle for 10 to 20 cents on the dollar. This should be the outcome of every securitized mortgage quiet title action.


A securitized mortgage trial in the case of Unwashed v. JP Morgan would go something like this. JPMorgan would some into court holding a robo-signed assignment of mortgage and maybe, if they could find it, a note payable to Washington Mutual that was never transferred to a securitization trustee and was not endorsed to JP Morgan. JP Morgan would nevertheless claim that it had the right to seize the Unwashed family’s home.

Lawyer: Mr. Dimon, you are the CEO of JP Morgan. Isn’t it true that JP Morgan’s mortgage assignment was given to it by 24-year old high school dropout named Faith DeJesus in Albequrque, New Mexico who signed the assignment as “Vice President” of “MERs””?

Jamie Dimon: Yes, what of it?

Lawyer: Isn’t it true that prior to signing the assignment of mortgage, the mortage was owned by Washington Mutual?

Dimon: Of course.

Lawyer: Isn’t is true that Mr. DeJesus has no relationship with Washington Mutual, has no legal authority to sign anything on behalf of Washington Mutual, the company MERs (“Morgage Electronic Registration Services, Inc.”) is a CIA-adjacent corporation with headquarters in Reston, Virgina, MERs has no actual officers or employees, Mr. DeJesus is not in fact a MERS employee or officer of MERs, has never received a paycheck or any compensation from MERs as its alleged “Vice President,” and, at the time Mr. DeJesus signed the assignment in 2011, Washington Mutual had been out of business for three years?

Dimon: Well, that of course is a compound question and I don’t have foundation to respond to much of it, but for the sake of time I stipulate that it is all true because it is.

Lawyer: JPMorgan never loaned any money to the Unwashed family, did it?

Dimon: No. We generaly don’t loan money, we have a license to create currency. So did Washington Mutual. That is mostly what we banks do when someone signs a promissory note payable to us, create new currency. By siging the note, they consent to the creation of the new currency. But you are right, we did not loan any of our currency to the Unwashed family and were not involved in getting their consent to create new currency.

Lawyer: The Unwashed note payable to Washington Mutual is in the amount of $400,000, correct?

Dimon: Yes.

Lawyer: When did JPMorgan acquire the note?

Dimon: September 25, 2008.

Lawyer: From whom did JP Morgan acquire the note?

Dimon: Hank Paulsen.

Lawyer: The Secretary of the Treasury?

Dimon: Yes. Technically, we acquired it from the FDIC that shut down WaMu on September 15, 2008. But Hank called me on the 25th and asked me if I wanted to acquire WaMu’s $309 billion in assets for $1.9 billion. Of course I said yes.

Lawyer: Did the offer include the Unwashed note?

Dimon: Yes.

Lawyer: What did you pay for the Unwashed note?

Dimon: It was a package deal, but everything was discounted by around 97 percent, so we paid about $12,000.

Lawyer: Did Mr. Paulsen tell you why you were getting such a great deal on the $400,000 Unwashed note?

Dimon: No.

Lawyer: Do you know why you got such a great deal?

Dimon: Of course I know why. Every Bailout Bank and every Wall Street banker knows that each and every securitized mortgage loan is flawed and that makes the mortgage unenforceable. Have you not read Professor Levitan’s testimony to the United States Senate in 2010?

Lawyer: I did, but I was beginnng to think I was the only one.

Dimon: No, we all know it.

Lawyer: So you knew when you purchased the Unwashed note that it was never properly securitized, that it was never physically transferred to the securitization trustee, and therefore JPMorgan could not foreclose the mortgage without first proving that it was the valid owner of the note?

Dimon: Yes.

Lawyer: So then why did you buy the Unwashed note?

Dimon: We believed it was a good investment based on location.

Lawyer: Location?

Dimon: Yes.

Lawyer: What is valuable about the location of the Unwashed Family home?

Dimon: That is not the location I am speaking of.

Lawyer: What location are you speaking of?

Dimon: The location of JPMorgan.

Lawyer: Why is the location of JPMorgan relevant to its investment in a fatallly flawed securitized loan?

Dimon: Sir, it is no wonder that you are representing the Unwashed, you yourself must be one of them. The location of JP Morgan is the most relevant factor in our investment in the Unwashed note.

Lawyer: I’m sorry, Mr. Dimon, I am indeed confused. Why you think JP Morgan’s location makes a bad investment a good one?

Dimon: Because it across the street from 33 Liberty Street and we have tunnel between us.

Lawyer: Oh, I had no idea.

Dimon: I gathered.

This dialogue unfortunately never happened.

As I said, I was very naive. I was cancelled shortly after walking into a federal courtroom on a cold January morning defending a state law quiet title action that I had brought in state court but was removed by the Bailout Banks to federal court for the purpose of the ambush on that January morning.

The judge came out, he thought, blazing. The transcript of the hearing is quite entertaining as the first words out of his mouth showed how deeply he misunderstood what the case was about and how securitized mortgages worked. His first words were something like: “Mr. Butler, you don’t deny that your clients borrowed money from these defendants, do you?”

I responded: “Your Honor, that is exactly what I deny.” I then explained that not one original lender was attempting to foreclose on my clients. All the loans had been originated by a “table lender” (really a broker who received the orgination fee) and immediately sold to some unknown party. In some cases, my clients had paid 3-5 “servicers” before, ultimately, six or seven years later, the real, alleged “owner” of the debt appeared in the foreclosure. In many cases, the original securitization trustee was a now defunct or bankrupt entity (eg Countrywide, Wachovia, Lehman Brothers, etc.) that had been taken over by a compliant bailout recipient. I further informed Judge Schiltz that he did not need to take my word for it. He need only read Adam Levitan’s testimony or watch the 60 Minutes episode exposing the robo-signers.

To no avail, the unconscious judge issued this libelous order, not once mentioning that the case was a state-law based quiet title in which the burden of proving the enforceability of a fraudulently prepared and recorded assignment of mortgage is on the party claiming that they own the mortgage–see FNBER v. IMS.


Mortgage Electronic Registration Systems, Inc. (“MERS”), like the DTCC and the other central clearing corporations noted in Mr. Webb’s Great Taking, is a very mysterious entity. No employees, no officers, no board of directors. Located in CIA spook central, Reston, Virginia. The wikipedia page actually does justice to the absurdity that such an entity even exists. It holds, as a “nominee” like the DTCC, perhaps 100 million mortgages. But it is not a mortgagee or bank. Its purpose is fairly clear: to avoid county recording fees when mortgages are transferred and to hide the identity of the owners of securitized mortgage loans.

Well over 80 percent of all foreclosures, back in the GFC and still today, are intiated by MERS “Vice Presidents” who are actually employees of securitized mortgage loan servicers putting on the hat of “MERS Vice President” for a day or a minute to get a foreclosure process rolling. They are never located in Reston, Virginia. Texas, South Carolina, California, and Utah are the most common locations of MERS Vice Presidents. MERS Vice Presidents do all the dirty foreclosure work. They hire the lawyers by signing powers of attorney and transfer mortgages and deeds of trust. I suspect that they are low-paid, siloed employees who mostly have no idea whether they have the actual authority to sign the documents that they sign.


Now that you have an understanding of how the securitized mortgage foreclosure game works and how mortgages, like securities in the Great Taking, have been dematerialized (by being separated from legal ownership of the note), the rest of this piece will show you what you can do if you, a friend, or a family member is being subjected to a fraudulent securitized mortgage foreclosure. This works. An old client came back to me a two years ago with a bank demanding $3 million in a foreclosure on a lakefront property. After asking the questions below, the bank dropped its $3 million demand to $1 million, allowing the client to sell the property prior to the foreclosure and walk away with close to $250,000. Although we had to retain a licensed lawyer and coach him in the process, asking the questions below to any foreclosing bank or law firm and then accurately recording the questions and answers to the questions against the property prior to the foreclosure, will compel movement. Because they know they are lying.

My license was suspended because my quiet title actions were, in the eyes of the judicial Praetorian Guard, “frivolous.” The Guard claimed that they were frivilous because, in 2009 just prior to the foreclosure crisis taking off, the Minnesota Supreme Court conveniently blessed all foreclosures conducted by MERS. In retrospect, the case, Jackson v. MERS, could have been a setup that was meant to fail in order to set a precedent that would assist MERS in cleaning up nationwide. The case was brought on the weakest of possible legal grounds by an oddball collection of left-wing political suspects who had no understanding or real estate law, foreclosure law, or property rights: a liberal Minnesota law school law professor, ACORN, the Minneapolis Urban Action League, and the Jewish Community Action League. My cases were quiet title actions and had nothing to with MERS or Jackson v. MERs. When I came along with something that would actually work, that was not part of the narrative and so I had to be dealt with harshly.

But something interesing happened in the process. Like Mr. Webb pouring conscious light on dematerialized securities, by 2011 all the foreclosure lawsuits brought by me and others caused the Federal Office of the Comptroller of the Currency to intervene and reprimand MERS and the Bailout Banks.

The most important result was that in July of 2011 the MERS changed its rules to require that, going forward, all securitized mortgage foreclosures be conducted by or on the express behalf of the “Note Owner.” That’s right, MERS Rules require that foreclosing banks and servicers not only “Show Me the Note,” the MERS rules require that they “Show Me that You Own the Note.”

MERs Rule 8(e) now specifically requires:

(e) The Note Owner or the Note Owner’s Servicer shall cause the Signing Officer to execute the assignment of the Security Instrument from MERS to the Note Owner, or the Note Owner’s Servicer, or such other party expressly and specifically designated by the Note Owner, before initiating foreclosure proceedings or filing Legal Proceedings and promptly send the assignment of the Security Instrument (in recordable form) for recording in the applicable public land records.

An interesting thing about the MERS Rules. They are nearly impossible to find on the internet. I have a copy only because I submitted them in defense of the my law license suspension.

The good news is that my suffering is your gain. I have discovered a way to demand the truth from a bank or servicer foreclosing a securitized loan and to do so without having to get through the Praetorian Guard.

If you or a loved one is facing foreclosure of a MERS loan, it is perfectly acceptable to demand that the bank comply with the MERS rules and prove to you that, prior to commencing the foreclosure, the servicer confirmed that the bank ordering the foreclosure is in fact the “note owner.” Demand receipts. As you can see, determining who is a “note owner” is a very difficult and complex question in the case of securitized loans. It is so difficult that just asking the question and stating that you will record the answer against the property may cause a bank to drop its foreclosure demand by $2 million.

So, if you or someone you know is facing a MERS foreclosure, ask:

Are you my note owner?

How did you acquire my note?

When did you acquire it?

What did you pay for it?

Do you own the note exclusively or do others have claims to the proceeds of the note?

From whom did you acquire the note?

If the note is part of a securitization trust, please provide any and all evidence (e.g. a Trustee’s Certificate and the pooling and servicing agreement) that shows that the note was physically delivered to the trust prior to the trust closing date.

Thank you in advance for your cooperation.

There are always additional, particular questions that relate to the cluelessly signed “MERS Vice President” documents, but this will get you started.

With courts and public officials either hopelessly unconscious or hopelessly compromised, the last bastion of defense is the over 2000 “red” county recorders’ offices in the United States. MERS Rule 8(e) requires proof of note ownership prior filing any foreclosure document with any county recorder. So make them play by their own rules. One of the unsung heroes of the 2010-12 foreclosure crises was Massachusetts’ Southern Essex Examiner of Deeds John O’Brien who saw many fraudulently signed documents come into his office and started taking notes.

I am optimistic.