Supreme Judicial Court

FOR THE COMMONWEALTH OF MASSACHUSETTS NO. SJC-11041

HENRIETTA EATON, PLAINTIFF-APPELLEE, v. FEDERAL NATIONAL MORTGAGE ASSOCIATION & ANOTHER, DEFENDANTS-APPELLANTS.

ON APPEAL FROM THE APPEALS COURT SINGLE JUSTICE

BRIEF OF AMICUS CURIAE MARIE MCDONNELL, CFE

Marie McDonnell, CFE Mortgage Fraud and Forensic Analyst Certified Fraud Examiner Truth In Lending Audit & Recovery Services, LLC P.O. Box 2760, Orleans, MA 02653 Tel. (508) 255-8829 Fax (508) 255-9626 E-Mail: Marie.McDonnell@truthinlending.net Website: http://truthinlending.net

Dated: September 30, 2011

i TABLE OF CONTENTS TABLE OF AUTHORITIES ............................... ii STATEMENT OF AMICUS INTEREST ........................ 1 STATEMENT OF THE ISSUES ............................. 7 STATEMENT OF THE CASE AND FACTS ..................... 8 SUMMARY OF THE ARGUMENT ............................ 10 ARGUMENT ........................................... 14 I. II. THE MORTGAGE CONTRACT CONTROLS. .......... 14 THE PIVOTAL ASSIGNMENT OF MORTGAGE THAT PURPORTS TO TRANSFER THE EATON MORTGAGE TO DEFENDANT GREEN TREE IS INVALID. ...... 19

CONCLUSION ......................................... 22 EXHIBIT A Fannie Mae Announcement 08-12, May 23, 2008 EXHIBIT B Note, September 12, 2007 EXHIBIT C Mortgage, September 12, 2007 EXHIBIT D MERS Research Results EXHIBIT E Assignment of Mortgage, April 22, 2009 EXHIBIT F Robo-Signer Monica Medina, Southern Essex District Registry of Deeds EXHIBIT G The New Man at MERS, Bill Beckmann Interview CERTIFICATE OF COMPLIANCE

ii TABLE OF AUTHORITIES CASES: U.S. Bank National Association v. Ibanez and Wells Fargo Bank, N.A. v. LaRace, 458 Mass. 637 (2011)..........................1, 7 STATUTES: Massachusetts General Laws Ch. 183.........................................17 Ch. 185 67....................................18 Ch. 266 35A(b)(4)...............................6 MISCELLANEOUS: Blacks Law Dictionary, Sixth Edition, 1990..........19

1 STATEMENT OF AMICUS INTEREST I, Marie McDonnell, am a Mortgage Fraud and Forensic Analyst and a credentialed Certified Fraud Examiner. I am the founder and managing member of Truth In Lending Audit & Recovery Services, LLC of Orleans, Massachusetts and have twenty-four years experience in transactional analysis, mortgage auditing, and mortgage fraud investigation. I am also the President of McDonnell Property Analytics, Inc., a litigation support and research firm that provides mortgage-backed securities research services and foreclosure forensics to attorneys nationwide. McDonnell Property Analytics also advises and performs services for county registers of deeds, attorneys general, courts and other governmental agencies. I am the same Marie McDonnell who provided amicus briefs to the Massachusetts Land Court and to the Massachusetts Supreme Judicial Court in the landmark cases U.S. Bank National Association v. Ibanez and Wells Fargo Bank, N.A. v. LaRace, 458 Mass. 637 (2011) in which the courts vacated two foreclosures

2 prosecuted by trustees of securitization trusts. 1 My seminal contribution was to shift the debate beyond defective assignments of mortgage to an examination of the fatal breaks in the chain of title that occurred due to the utter failure of the entities that securitized these mortgages to document the transfers between themselves. More recently, John OBrien, 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.

McDonnells Amicus Brief is available on the Massachusetts Supreme Judicial Courts website at: http://www.ma-appellatecourts.org/search_number.php? dno=SJC-10694&get=Search.

3 I accepted this assignment on a pro bono basis because of its high and urgent value to the public trust, and to educate the 50 Attorneys General who are brokering a settlement with the subject banks in an attempt to resolve fraudulent foreclosure practices. My entire report with exhibits is available at no charge to the public at: http://salemdeeds.com and at https://www.truthinlending.net. I defined the scope of the examination by selecting all assignments of mortgage that were recorded during the year 2010 to and from three of the nations largest banks: JPMorgan Chase Bank, N.A.,

Wells Fargo Bank, N.A., and Bank of America, N.A. The sample was neither random nor arbitrary; we included every assignment that appeared in the Grantor / Grantee index using the registrys online search engine. The study included 147 assignments involving JPMorgan Chase; 278 assignments involving Wells Fargo Bank; and 140 assignments involving Bank of America. Before examining the documents, I enlisted the help of Attorney Jamie Ranney of Nantucket, Massachusetts to establish definitions of terms based on Massachusetts law that I could rely upon to determine whether an assignment was either: valid,

4 missing, questionable, invalid, fraudulent, or criminally fraudulent. These definitions are attached

as Exhibit A to my report; Exhibit B explains my methodology, protocols and practical applications for classifying assignments of mortgage according to the prescribed definitions; Exhibit C is a list of robosigners that we identified which also provides information on whom the robo-signors executed documents for, who they were actually employed by (if we knew), and how many documents they executed. From there, we researched the underlying mortgage and assembled all documents cross-indexed thereto such as prior assignments of mortgage, discharges of mortgage, orders of notice, and all documents recorded in connection with a completed foreclosure. This

increased the population of examined documents to approximately 2,000. In total, 473 unique mortgages were analyzed, covering $129,577,415 in principal obligations. The results of my investigation were shocking and revealed widespread, systemic, patterns of practice of fraud and abuse by the mortgage banking and servicing industries; and especially by their controversial private utility, Mortgage Electronic Registration

5 Systems, Inc. which has eviscerated transparency from the time-honored public recording system, and so defiled the integrity of the Southern Essex District Registry of Deeds that John OBrien has called for a full forensic audit of his registry. 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.)

6 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. My audit of the Southern Essex District Registry of Deeds is relevant here because Henrietta Eatons situation is a case in point of what typically happens when Fannie Mae, its Servicer, and Mortgage Electronic Registration Systems, Inc. conspire to suppress the identity of the true owner and holder of a borrowers note and mortgage so that they can illegally foreclose upon the collateral property without raising suspicion. My interest in offering this amicus brief is simply to shed the light of the truth on the documentary evidence available in the public record so that this venerable Court will not be fooled by the charade that is playing out before it now. I offer my services here pro bono as a public service. I have not requested, accepted nor received

any compensation for my efforts; nor do I have a stake

7 in the outcome of the litigation except to see that justice prevails. STATEMENT OF THE ISSUES 1. The issue presented is the validity of a

foreclosure conducted by a [successor] mortgagee who [took the mortgage by assignment and purported to] hold the mortgage but not the underlying promissory note at the time of foreclosure. 2. A condition precedent to resolving issue # 1

is to establish that the successor mortgagee seeking to foreclose can prove that it received a valid assignment of the mortgage from a party that itself held the mortgage. If more than one transfer was

involved, the successor mortgagee must be able to provide a complete unbroken chain of assignments linking it to the record holder of the mortgage. 2 3. If issue #2 fails, then issue #1 becomes

academic in nature with respect to the instant case; however, the Supreme Judicial Courts ruling will be of inestimable value to other matters that involve the separation of the note from the mortgage due to

See U.S. Bank v. Ibanez, 458 Mass. 637 (2011).

8 securitization, the use of Mortgage Electronic Registration Systems, Inc., or inadvertence. STATEMENT OF THE CASE AND FACTS Amicus Curiae McDonnell hereby adopts the statement of the case and facts presented by the Plaintiff-Appellee, Henrietta Eaton, in her Brief of Appellee docketed with the Massachusetts Supreme Judicial Court on September 23, 2011 in the instant appeal. However, also relevant to this case indeed, essential are critical facts that arise upon an examination of the assignment of mortgage recorded in the Suffolk County Registry of Deeds on May 20, 2009 at Book 44958 Page 249 by which Mortgage Electronic Registration Systems, Inc. as nominee for BankUnited, FSB purports to assign and transfer to Green Tree Servicing LLC all its right, title and interest in and to the Eaton mortgage. Simply put, if the operative assignment is shown to be invalid, the issue of whether or not a mortgagee who neither owns nor holds the note can foreclose on the collateral property becomes academic in nature. Moreover, if the assignment is invalid, the foreclosure of the Eaton property would fail as a

9 matter of law without having to consider the splitting factor i.e., that the note and mortgage are held by different entities. Finally, if the assignment is invalid neither of the Defendants, Green Tree Servicing LLC nor its assignee Federal National Mortgage Association, have the requisite standing to invoke the jurisdiction of the Massachusetts courts. Plaintiff-Appellee Eaton has pleaded her case well both in the Housing Court, the Suffolk County Superior Court, and before this Supreme Judicial Court. She has properly cited Massachusetts common law, the relevant statutes, and the terms of the mortgage contract itself, all of which require unification of the note and mortgage prior to the institution of a foreclosure action. The law of this case, which will ultimately resolve issue #1, is well settled and does not require the Supreme Judicial Court to pay deference to the business models, innovations, rules and customs that the mortgage banking industry has adopted which have wreaked havoc of cataclysmic proportions throughout all sectors of our economy and have had far-reaching

10 effects on other sovereign nations and emerging markets around the globe. What is baffling here is that the DefendantAppellees who stand to profit from the instant foreclosure are purposely suppressing the identity of the real party in interest. This Honorable Court should want to know, why is that? Whats there to hide? Whats there to gain? And how does this tie into the ever-increasing lack of transparency I quantified after auditing the Southern Essex Registry of Deeds? SUMMARY OF THE ARGUMENT Amicus Curiae McDonnell hereby adopts and ratifies the arguments, citations to relevant common law, Massachusetts General Laws, and the operative terms of the mortgage contract presented by the Plaintiff-Appellee, Henrietta Eaton, in her Brief of Appellee docketed with the Massachusetts Supreme Judicial Court on September 23, 2011 in the instant appeal. Further, I argue below that not only does the Eaton mortgage require that the Note and the attendant Security Interest (Mortgage) be transferred together when sold; but the policies and procedures of Defendant-Appellant Federal National Mortgage

11 Association (Fannie Mae) require that its Loan Servicer hold both the note and the mortgage prior to instituting a foreclosure action. Additionally, if required by Applicable Laws, the Loan Servicer must also gain physical possession of the note by submitting a Request for Release of Documents from Fannie Maes Document Custodian. . (See Exhibit A.

Fannie Mae Announcement 08-12, 5/23/2008) Having an understanding of Fannie Maes policies and procedures helps to explain why Mortgage Electronic Registration Systems, Inc. (MERS) functions as it does, especially when a MERS Member is prosecuting a foreclosure action. However, as will become apparent, Fannie Maes protocols and MERS Rules are in direct conflict with the Massachusetts General Laws governing foreclosure. The pivotal Assignment of Mortgage (Assignment) that purports to transfer the Eaton Mortgage from Mortgage Electronic Registration Systems, Inc. (MERS) as nominee for BankUnited, FSB to Green Tree Servicing LLC (Green Tree) is invalid for a variety of reasons explained in detail below. Moreover, the purpose of this Assignment is not to memorialize a true sale of the Note and Mortgage to

12 the Assignee; but rather, it is a litigation tool designed to close the gap in the chain of title so that it appears in the public record that the Assignee, Green Tree in this case, had the legal right to foreclose the property. This sham Assignment is a necessary precursor to the ultimate recordation of the Foreclosure Deed; otherwise, Registers of Deeds would not allow title to pass to the foreclosing entity. It is incumbent upon consumers, their attorneys, registry staff, clerks of court, and judges to learn how to recognize these sham assignments because they are corrupting the chain of title in our land records; and because, once recorded, courts afford them deference rather than seeing them for what they are: counterfeits, forgeries and utterings. The MERS System is no replacement for the timehonored public land recording system that is the foundation of our freedom, our prosperity, and our American way of life. By privatizing property transfer records MERS has been allowed to set up a control fraud of epic proportions that has facilitated the largest transfer of wealth in human history, and it should be abolished.

13 I have copious evidence that the MERS System simply does not do what it claims to do. It is incomplete, inaccurate, misleading, unreliable, selfcontradictory, and asynchronous with the timing of events as they actually happened. Moreover, I have

witnessed that certain entries reflected in MERS Milestone Reports appear to have been made during the course of litigation in an attempt to square MERSs internal records with the timeline of external events. Indeed, the New Man at MERS, Bill Beckman was just interviewed by Mortgage Technology Magazine and he frankly admits: We did not have a robust process to make sure that all the data on our system was accurate, timely and reliable. Our view was that is the servicers data and theyre relying on it for their own transactions, theyre using their own systems, so we dont have to double checkWell, the regulators took the perspective of, No. Youve got your name on it. Its your system. It is being used, but you dont know exactly the way its being used, so theres no reason those two things shouldnt line up. (See Exhibit G. The New Man at Mortgage

Electronic Registration Systems, Inc., Bill Beckman Interview)

14 ARGUMENT I. THE MORTGAGE CONTRACT CONTROLS. On September 12, 2007, Henrietta L. Eaton (Eaton or Appellee) executed a Note in favor of BankUnited, FSB to obtain funds in the amount of $145,000.00. The terms of the subject Note indicate that the principal amount would be financed at a fixed interest rate of 6.875% per annum; and that the monthly installments of $952.55 beginning on November 1, 2007 would be sufficient to fully amortize the obligation over the thirty (30) year term to maturity by October 1, 2037. 9/12/2007) To guarantee the debt, Eaton executed a Mortgage encumbering residential property located at 141 Deforest Street, Roslindale, Massachusetts 02131 (Property). The Mortgage names BankUnited, FSB (BankUnited) as the Lender and defined MERS as Mortgage Electronic Registration Systems, Inc. MERS is a separate corporation that is acting solely as a nominee for Lender and Lenders successors and assigns. MERS is the mortgagee under this Security Instrument. (See Exhibit C. Mortgage, 9/12/2007) (See Exhibit B. Note,

15 The Mortgage in question is what is known as a MERS Original Mortgage (MOM) and is being tracked in the Mortgage Electronic Registration Systems, Inc. database as MIN #100526500053612901. MERS reports that as of June 24, 2011, the status of the Eaton Mortgage is Inactive meaning that the servicing rights and the beneficial ownership rights in the Mortgage are no longer being tracked in the MERS System. It also indicates that Green Tree Servicing LLC was the last Servicer of record and that Fannie Mae was the Investor, i.e. owner and holder of the Mortgage Loan at the time the Mortgage was deactivated. Exhibit D. MERS Research Results) A close reading of the Note and Mortgage clearly indicates that the contract is between Eaton as Borrower and BankUnited as Lender. MERS has no (See

position in the Note and is not authorized to take any action on behalf of the Lender under the terms thereof. The Mortgage, on the other hand, provides that MERS may take certain actions on behalf of the Lender if so directed by the Lender or the Lenders successors and assigns. The granting clause reads as follows:

16 This Security Instrument secures to Lender: (i) the repayment of the Loan, and all renewals, extensions and modifications of the Note; and (ii) the performance of Borrowers covenants and agreements under this Security Instrument and the Note. For this purpose, Borrower does hereby mortgage, grant and convey to MERS (solely as nominee for Lender and Lenders successors and assigns) and to the successors and assigns of MERS, with power of sale, the following described property located in the County of Suffolk which currently has the address of 141 Deforest Street, Roslindale, Massachusetts 02131. There is no contractual language in the Mortgage that gives MERS the independent right to enforce the Note and Mortgage; or even to assign its position in the Mortgage without the express direction and authorization of the Lender or the Lenders successors and assigns. The Mortgage contains notice to the Borrower that the instruments memorializing the mortgage obligation may be sold; however, the clear representation made to Eaton was that her Note and Mortgage, if sold, would move together and remain inextricably linked. The relevant section of the uniform covenants contained in the Mortgage reads as follows: 20. Sale of Note; Change of Loan Servicer; Notice of Grievance. The Note or a partial interest in the Note (together with this Security Instrument) can be sold one or more times without prior notice to Borrower.

17 A sale might result in a change in the entity (known as the Loan Servicer) that collects Periodic Payments due under the Note and this Security Instrument and performs other mortgage loan servicing obligations under the Note, this Security Instrument, and Applicable Law. [Emphasis supplied] Thus, irrespective of whether or not MERS is involved in a nominal capacity, the Mortgage must follow the Note pursuant to the strict language of the contract between the parties. Notwithstanding MERS overall scheme to avoid the recording of Assignments in the public records, the Lender or the Lenders successor and assigns are bound to do so under the terms of the mortgage contract and all Applicable Laws as explained further below. Massachusetts General Laws Chapter 183 governing the recording of documents in the county Registry of Deeds does not specify when an assignment of mortgage must be recorded. The presumption here is that all assignees would want to record their position in order to protect themselves from the risk of loss. While auditing the Southern Essex District Registry of Deeds, we came across numerous assignments that were recorded as much as ten (10) years after the mortgage had been discharged. Those were an obvious attempts to

18 close the gap in the chain of title which stands for the proposition that, eventually all valid assignments must be recorded to maintain the integrity of title to real property. In contrast, M.G.L. Ch. 185 67 is explicit on this subject and requires that all assignments affecting registered land shall be registered. statute in its entirety states emphatically: The owner of registered land may mortgage it by executing a mortgage deed. Such deed may be assigned, extended, discharged, released in whole or in part, or otherwise dealt with by the mortgagee by any form of deed or instrument sufficient in law for the purpose. But such mortgage deed, and all instruments which assign, extend, discharge and otherwise deal with the mortgage, shall be registered, and shall take effect upon the title only from the time of registration. [Emphasis supplied] The clear statutory requirement codified in M.G.L. Ch. 185, 67 establishes that all instruments that assign the mortgage shall be registered. If nothing else, common sense dictates that this requirement carries over to recorded land as well; otherwise, in a situation where a property consists of an assemblage of both recorded land and registered land, the result would be absurd i.e., the chain of title to Parcel I would be different from Parcel II The

19 even though both lots were equally impacted by the same transactions. This is not a hypothetical situation as I have just completed an analysis of a case involving this scenario. II. THE PIVOTAL ASSIGNMENT OF MORTGAGE THAT PURPORTS TO TRANSFER THE EATON MORTGAGE TO DEFENDANT GREEN TREE IS INVALID. Blacks Law Dictionary defines the term valid as having legal strength or force, executed with proper formalities, incapable of being rightfully overthrown or set aside Founded on truth of fact; capable of

being justified; supported, or defended; not weak or defectiveOf binding force; legally sufficient or efficacious; authorized by lawas distinguished from that which exists or took place in fact or appearance, but has not the requisites to enable it to be recognized and enforced by law. (See Blacks Law Dictionary, Sixth Edition, 1990, page 1550) My examination of the Assignment of Mortgage recorded in the Suffolk County Registry of Deeds on May 20, 2009 at Book 44958 Page 249 by which Mortgage Electronic Registration Systems, Inc. as nominee for BankUnited, FSB purports to assign and transfer to Green Tree Servicing LLC all its right, title and interest in and to the Eaton mortgage revealed the

20 following facts: (See Exhibit E. Assignment of Mortgage) 1. The Appellants state in their Brief that, After the loan was funded, the Note was endorsed in blank and transferred to Fannie Mae, which retained Green Tree to service the loan. [Appellants Brief, p. 4] On information and belief, this transfer from BankUnited to Fannie Mae occurred at or near the origination date of September 12, 2007. Accordingly, BankUnited had no interest in the Eaton Mortgage to transfer on April 22, 2009. Moreover, BankUnited had conveyed all right title and interest to Fannie Mae and could not sell the Mortgage for a second time to Green Tree. The Appellants admit that Green Tree was the Loan Servicer. The Assignment of Mortgage in question was executed by Monica Medina, Assistant Secretary of Mortgage Electronic Registration Systems, Inc. acting on behalf of BankUnited, FSB. Monica Medina is not an employee of MERS; and she was not employed by BankUnited on April 22, 2009 when she executed this Assignment. In truth, Monica Medina is employed by Green Tree Servicing LLC at its headquarters in Tempe, Arizona. Thus, what we have here is a fictitious, self-dealing Assignment of Mortgage that contains false statements, misrepresentations, and omissions of material fact in order to deceive or defraud. It was prepared and executed by Green Tree without BankUniteds knowledge, authority or consent.

2.

3.

4.

5. 6.

7.

8.

9.

21 10. This Assignment was not prepared for the purpose of legally transferring the Eaton Mortgage to Green Tree. Rather, it is a litigation tool that was prepared under false pretenses to close the gap in the chain of title to so that Green Tree could prosecute the instant foreclosure, which it completed on November 4, 2009.

In preparation for writing this amicus brief, I called upon Register John OBrien to search the Southern Essex District Registry of Deeds filings for other assignments that were executed by Monica Medina (Medina). As of this writing, eleven (11) assignments were provided to me for review. The results are astonishing and clearly establish a pattern and practice of assignment fraud. Medina executed the assignments on behalf of ten (10) different assignors in her dual role as a MERS Certifying Officer or as Authorized Agent for Green Tree. (See Exhibit F. - Robo-Signer Monica Medina) In my capacity as a Certified Fraud Examiner, I hereby certify to the Massachusetts Supreme Judicial Court that the above-described Assignment of Mortgage is fraudulent and therefore, it is void as a matter of law. Thus, everything that flows from this breeder document is tainted with fraud and must be revoked.

22 CONCLUSION In closing, I want the Justices to know that my audit of the Southern Essex District Registry of Deeds enabled me to examine 565 Assignments of Mortgage, the majority of which were prepared in order to foreclose on John OBriens electorate. Every single assignment of mortgage that I examined that was prepared to prosecute a foreclosure, without exception, is tainted with the same fraud that I have detailed here. The consequences to homeowners, the public land recording system and the state and federal court systems are devastating. In particular, the Massachusetts Land Court is being used as the entry point for these false documents as foreclosure law firms introduce them with Complaints to Foreclose in Servicemembers Civil Relief Act cases. The crisis is so severe; it requires the immediate attention of the Executive, Legislative and Judicial branches of the Commonwealth of Massachusetts in order to protect its citizens, its real property, and the rule of law.

23 Respectfully submitted,

_____________________________ Marie McDonnell, Affiant Mortgage Fraud and Forensic Analyst Certified Fraud Examiner, ACFE McDonnell Property Analytics, Inc. P.O. Box 2067 Orleans, Massachusetts 02653 (v) 508-694-6866 (f) 508-694-6874 Dated: September 30, 2011

EXHIBIT A
Fannie Mae Announcement 08-12
May 23, 2008

AMICUS BRIEF OF MARIE MCDONNELL Henrietta Eaton v. Federal National Mortgage Association & Another

EXHIBIT B
Note
September 12, 2007

AMICUS BRIEF OF MARIE MCDONNELL Henrietta Eaton v. Federal National Mortgage Association & Another

EXHIBIT C
Mortgage
September 12, 2007

AMICUS BRIEF OF MARIE MCDONNELL Henrietta Eaton v. Federal National Mortgage Association & Another

EXHIBIT D
MERS Research Results

AMICUS BRIEF OF MARIE MCDONNELL Henrietta Eaton v. Federal National Mortgage Association & Another

MERS Servicer Identification System - Results

https://www.mers-servicerid.org/sis/search

1 record matched your search:

MIN: 1005265-0005361290-1

Note Date: 09/12/2007

MIN Status: Inactive Phone: (800) 643-0202

Servicer: Green Tree Servicing LLC Tempe, AZ Investor: Fannie Mae Washington, DC

Phone: (202) 752-7000

Return to Search

For more information about MERS please go to www.mersinc.org

Copyright 2006 by MERSCORP, Inc .

1 of 1

6/24/2011 8:44 AM

EXHIBIT E
Assignment of Mortgage
April 22, 2009

AMICUS BRIEF OF MARIE MCDONNELL Henrietta Eaton v. Federal National Mortgage Association & Another

EXHIBIT F
Robo-Signer Monica Medina
Southern Essex District Registry of Deeds

AMICUS BRIEF OF MARIE MCDONNELL Henrietta Eaton v. Federal National Mortgage Association & Another

ROBO-SIGNER MONICA MEDINA

ASSIGNMENTS OF MORTGAGE EXECUTED BY MONICA MEDINA AND RECORDED IN THE ESSEX SOUTHERN DISTRICT REGISTRY OF DEEDS

Execution Date Assignor MERS as nominee for First National Bank of Arizona MERS as nominee for Bankunited, FSB Green Tree Servicing LLC Green Tree Servicing LLC U.S. Bank, National Association, as trustee on behalf of Lehman Capital, Inc. a Division of Lehman Brothers Holdings, Inc as Debtor and Debtor in Possession in its Chapter 11 case in the United States Bankruptcy Court for the Southern District of New York, Case No. 08-13555 DB Structured Products Inc Green Tree Servicing LLC Green Tree Servicing LLC Assignee

Effective Date

Medinas Position
Assistant Secretary of MERS

MERS YES

05/31/2011

11/01/2009

06/01/2011

04/01/2009

Vice President of MERS

YES

05/27/2011

12/02/2009

Assistant Secretary of MERS Assistant Secretary of MERS Authorized Agent of Green Tree Servicing LLC

YES YES NO

05/27/2011

01/01/2011

06/23/2011

06/20/2011

MERS as nominee for Mortgage Partners, Inc. MERS as nominee for Family Choice Mortgage Corporation Green Tree Servicing LLC

07/10/2009

REO Properties Corporation by its attorney in fact Green Tree Servicing LLC

Authorized Agent of REO Properties Corporation by its attorney in fact Green Tree Servicing LLC U.S. Bank, National Association, as Trustee in trust for the benefit of the holder of SerVertis Fund I Authorized Agent of DB Structured Products, Inc. by its

NO

10/21/2009

DB Structured Products, Inc. by its attorney in fact Green Tree Servicing LLC

NO

McDonnell Property Analytics, Inc.

Page 1

ROBO-SIGNER MONICA MEDINA

ASSIGNMENTS OF MORTGAGE EXECUTED BY MONICA MEDINA AND RECORDED IN THE ESSEX SOUTHERN DISTRICT REGISTRY OF DEEDS

Execution Date Assignor Trust 2009-2 Certificates, Series 2009-2 MERS as nominee for GMAC Mortgage Corporation Assignee

Effective Date

Medinas Position
attorney in fact Green Tree Servicing LLC Assistant Secretary of MERS

MERS

04/08/2011

YES

04/15/2011

MERS as nominee for Mortgage Lenders Network USA Inc MERS as nominee for GMAC Mortgage Corporation

Assistant Secretary of MERS

YES

05/25/2011

10/01/2009

05/27/2009

MERS as nominee for BankUnited, FSB

The Bank of New York Mellon Trust Company, N.A. as Trustee for GMACM Home Equity Loan Trust 2006-HE3 The Bank of New York Mellon, Trustee forCSMA 2011-3, c/o Green Tree Servicing LLC The Bank of New York Mellon Trust Company, National Association, as Trustee for GMACM Home Equity Loan Trust 2006-HE3 Green Tree Servicing LLC

Assistant Secretary of MERS

YES

Assistant Secretary of Mortgage Electronic Registration Systems, Inc. as nominee for BankUnited, FSB

YES

McDonnell Property Analytics, Inc.

Page 2

EXHIBIT G
The New Man at MERS
Bill Beckmann Interview

AMICUS BRIEF OF MARIE MCDONNELL Henrietta Eaton v. Federal National Mortgage Association & Another

Vol. 18, No. 4 September 2011

mortgagetechnology.com

TOUGH QUESTIONS FOR

Bill Beckmann seeks to tackle challenges

MERS

Tech Savvy Lenders | .NET Framework | MMC Exams

Photography By Randall Scott

The New Man at

MERS
Mortgage industry veteran Bill Beckmann says he can lead embattled Merscorp through its tough times.
By Austin Kilgore BILL BECKMANN BEGINS EACH WEEK WITH A FLIGHT from his home in St. Louis to Washington, D.C. e weekly ights have become a routine of sorts since he took on a job that of late, has become among the most daunting in the mortgage industry, president and CEO of Merscorp Inc. e company, located in the capital suburb of Reston, Va., runs MERS, the Mortgage Electronic Registration Systems. Its MERS System is a database that tracks mortgage servicers and corresponding promissory note owners for 60% of the nations residential mortgages. Merscorp was created and is owned by the biggest players in the mortgage industry, including the government-sponsored enterprises and the nations largest mortgage lenders and servicerslike Citi, where Beckmann spent 25 years of his career, including time serving as the president of its CitiMortgage unit from 2005 to 2008. But MERSs role in the foreclosure process has come under re from borrower advocates and regulators, ultimately leading to a consent order issued by federal regulators two weeks before Beckmanns hiring was announced. In an exclusive interview with Mortgage Technologyhis rst with any media since taking the new roleBeckmann explains how hes leading the e ort to overcome Merscorps challenges and why he believes in the future of MERS.
www.mortgage-technology.com

12

Mortgage Technology September 2011

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What compelled you to take this job? I loved MERS for three reasons. One is that its an interesting company at a dicult time. I felt like I could dive in and make a dierence. And I still feel that way; its proven to be true. The second part is I really liked the board. I liked that we have Fannie and Freddie and the top lenders supporting the company. Even though its a tough time, you couldnt have a better board. I gure that if I can help get through the tough times, the ability to move the company forward later with the backing of a group like this would be incredible. The third part, personally, I spent 25 years at Citigroup, a company with 250,000 people. By the end, I probably had more bosses there than I have sta here. The ability to be part of a small company where I can walk down the oor and talk to people instead of having to email or conference call, and work for a board of directors which I had never done before, was really just an interesting calling. Having come from a MERS member, do you feel you can relate to the members? I understand it from the other side. I supported MERS when I was at Citi and I helped make investments in it. I understood its value proposition. Coming into this, I had a basic understanding of how the members think about it. That helps me day-to-day. Equally important, having run a large mortgage company, I understand the broader perspective and I know many of the personalities Im working with. They can call me up if theyve got an idea or problem, and I have the ability to reach out and gain access to senior leaders during the middle of a tough time is pretty good and I think that helps us.

At Citigroup, we were a heavily regulated institution, especially during 07-08 when the market started to turn. So I have a lot of familiarity and comfort working with regulators, the OCC and OTS, and I knew it was something new for this organization. So my ability to come in here and feel like that with the right eort, this is a solvable problem, was huge. What stands out about what you know now inside MERS that you didnt know before? That MERS really is a small company. Were up to 65 people now, from 50 at the beginning of the year. For something so important, with 60% market share in the U.S. of a back oce utility function for all the key players, it really is a small company. There is some very focused expertise, but its just not that deep. Our core functions are done with outsourced vendors. The key knowledge base is very concentrated and that was certainly a big difference. Im not sure I really understood that when I was a member. I think this is new, but I also didnt have as much of an appreciation of how much eort members are spending on MERS. Is that small size and concentrated expertise a strength or weakness? Its a little bit of both. One of the reasons it was an appeal to me coming here is that were small and nimble. I dont have to go through a matrix organization or a series of committees to get stu done. We have ocers meetings a couple of times a week and if we need to make a decision, we can make it. Even when I need to go to the board, theyre very supportive. Theyre here to make sure were staying on the straight and narrow on the compliance order. They meet monthly and I get stu done real fast. So in that sense, its good. But its a challenge to go through periods of time, for example, like with the consent order, where you have a large amount of work come in all at once.

For example, weve now become a vendor to our members and the vendor management groups of eight to 10 of the large banks want to come in and do a vendor management reviews. Thats a challenge when you have a small group. But those are things you just have to deal. There are peaks and valleys in any business. Id submit that all the servicers and banks are dealing with that capacity issue and trying to get things lined up. Thats one of the reasons I came here. What are the other strengths of MERS? I remain convinced more than ever of the value proposition of the business. While its been a under re in the press, the truth is bringing e-commerce to the process and eliminating unnecessary recordings really is a positive thing thats of value. Thats why despite the controversy and compliance issues, the members have stood behind us. The board is phenomenal. If you added up the market share of the board, its the vast majority of the industry. Having that group behind you and the expertise and the resources behind them if you need help is tremendous. The other thing that doesnt get talked about is the connectivity. Were connected to Fannie, Freddie and all the members. Were connected to LPS. We are the de facto standard in terms of connectivity among all the dierent players. I think thats something that as we go forward and think about new opportunities weve got to x the challenges we have in front of usbut as I think about the future, the connectivity, the data and that member support, taking it as a whole, it really puts us in a unique position. What are Merscorps biggest weaknesses? One is the fact that were small. Were transitioning from almost like an association to really a vendor of Fortune 500 companies. Thats dierent for us. We didnt have the support, infrastructure, systems and process to do that.

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What do you mean by the dierence between an association and a vendor relationship? We view our role as supporting the members activities. Thats what we were formed to do and were going to continue to do it well. One of our challenges has been, in doing that, is our name is on all those transactions. Take one of the consent order requirements. We did not have a robust process to make sure that all the data on our system was accurate, timely and reliable. Our view was that is the servicers data and theyre relying on it for their own transactions, theyre using their own systems, so we dont have to double check. Theyre performing those transactions, so theyre performing it that way.

Well, the regulators took the perspective of, No. Youve got your name on it. Its your system. It is being used, but you dont know exactly the way its being used, so theres no reason those two things shouldnt line up. So weve put in place a process now that were going to make sure that since we run a database, thats what we do, its going to be perfect. Its going to take a little while to get there, but thats the process were going through. Were going to have a quality assurance function to make sure it stays that way and all the other processes supporting that are done well. That wasnt something we did robustly before and thats one of the things weve been asked to do.

One of the other weaknesses we have is that were a niche and complex business. People dont understand us very well. Were hard to understand and that makes it dicult to get our message out in a crisp and clean way and I think that has hurt us a little bit. As the foreclosures brought our name into the forefront, people didnt understand us. Weve become sort of an easy villain because were a small company, we dont have a lot of employees in all the states and were owned by the banks. Our name was on some of the foreclosures and because our name is used by the servicers, we got pulled into some of those other bad practices. So thats been a weakness for us.

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Candidly, one of the weaknesses for us is we didnt have a communications function. We werent in the public eye and the market started to get ahead of us in terms of characterizing what we were and some of our challenges before we got in front to say, No, thats not what we do at all. Basically we just run the database and do the recordings and were a small organization and we actually do that pretty well. But some of these other issues that we get tied up into we werent defending or explaining very well. Thats a recent weakness for us.

SPOTLIGHT ON BILL BECKMANN

Is it possible to repair the public image of MERS? Its tough to repair because were never going to be a consumer company and were not going to be a household brand. But what we can hope to do and what were trying very hard to do is add balance to the story. Add a little bit of facts and a little bit of balance. For example, some of the legal decisions that are out there and some of the things that have challenged the MERS business model. We can give pages and pages of citations that show were winning 95% of the time. But what you see is the smaller ones. Weve really gotten to the point that were going to put out there every time we win. Were going to continue to do the press releases, not necessarily to say that were better or something else.

rior to becoming president and CEO of Merscorp, Bill Beckmann was most recently the president of his consulting rm, Beckmann Insights. Before that, he was president of CitiMortgage from 2005 to 2008. In his 25-year-long tenure at Citigroup, Beckmann held various roles, including president of the real estate servicing and technology group and chairman and CEO of its Student Loan Corp.

So when that next article comes out, hopefully well get the phone call to be able to explain that while this is an adverse decision, it hasnt changed the business model. The business model has 10 positive decisions for that one negative decision. What we have done is brought on professional help and some background help. Were going to get our messages tighter and crisper. Were going to be a little more proactive and react to the stories that arent right. But were not hoping to turn ourselves into a household name.

Is there relationship repairing that needs to happen with the MERS members? Absolutely. But I think weve done that pretty well. A few things have happened that help us there. The company has reconstituted its boards since the beginning of the year. Most of the key industry players are now on the board and that has helped us a lot. Theyre paying more attention to us. At least once a month, I personally get on a call with members and go over the state of MERS and allow them to ask questions. The same thing happens from a legal basis. They get a steady stream of communications from us. Weve done a pretty good job of enhancing communication with members because they read the same stories that everybody else reads. They need that continuous stream of communication from me and theyre getting that.

What about defending MERS to the judges, attorneys and others in the legal circle? On a specic legal case, theres not much we can do. You have to go by the facts and circumstances of the case. We the members are going to put up a robust defense and to the extent that theres an outcome thats dierent than others or that we dont like, well continue to ght that in the courts. So far, weve been successful. Where weve had certain things that have gone against us, nothing has been a full and nal judgment. Were still on appeal on those that we dont like and we continue to get some good decisions. One of our key challenges has been making sure the lawyers out there ghting on behalf of MERS get the story. There is an absolute critical need for us to explain how to defend things. Part of our plan this year is a very robust communication with members and their legal counsel. We have biweekly calls with our members counsels. We put out monthly litigation reviews. We put out quarterly case law studies. Were also in the process of putting together proprietary litigation management tools. Weve held calls between our outside counsel and the members outside counsels to share some of the strategy there. The natural follow on to that is when you talk about an attorney general or a state legislature. Thats where the education about what MERS is, why we do what we do and how its getting better really makes a big dierence. One of the key things has been eliminating foreclosures in MERS name. Thats been a lightning rod for a lot of people because it created customer confusion. The consumer doesnt understand who MERS is, even though its buried in their contract. By maintaining the relationship with the servicer, really then the focus is on does MERS have a legitimate right to assign? By and large, we feel weve had pretty good success defending that.

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Youre describing changes that focus a lot on Merscorps public message, which critics could dismiss as merely PR spin. What are the actual substantive changes that need to happen? Its a balance depending on the audience. Were not dealing with a consumer ad campaign here where it can be all spin and catchy. Were dealing with a sophisticated audienceattorneys, judges, legislators and candidly, some cynical reporters. It has to be balanced. It doesnt mean that were not going to put a positive edge or spin on things. But if its not balanced, if it doesnt explain factually who we are and what we do and the context of why our position makes sense and perhaps another doesnt, then were not going to have credibility. But when do you actually start doing what youre talking about? You can say youre improving, that quality assurance is getting better and youre addressing items in the consent order, but that takes time. When does the message actually start conveying real accomplishments rather than how you position your message? In some ways, the consent order was good for MERS and the members. The reason is it really added focus, attention and resources to a part of the business thats getting a lot of attention. What I like about the consent order is that it isnt just that MERS was told to x its process; the members were told to x theirs. Its a hand-in-glove approach. Whats great about this is the members now have made a commitment that said, If were going to use MERS, were going to treat them as a vendor with the same high standards we treat other vendors of a Fortune 500 bank. Were going to treat them with the same data security reviews. Were going to reconcile our data. So its not MERS thats reconciling the data to make sure their system of record is right with the MERS System. Theyre doing it every month and we just now have to check periodically that we agree with the results theyre coming up with.

They have to have a MERS QA plan. Our QA plan isnt a unique plan. Our QA plan is testing the QA plans of the members. Theyre really meant to t together. What we have in terms of the consent order, were really going to end up much stronger as an organization and the relationship with us and members in feeling condent that the processes and the procedures and the data is all good. Do you think its fair for people to ask why that wasnt in place to begin with? Yeah, sure. I think its fair. I think the answer is the organization grew up over a period of 15 years and it was never questioned, much in the same way I think that some of the robustness of servicing processes at servicers got questioned when they got put under stress. The process worked for a long time and when it was put under stress, people said, Look, thats just not good enough for the world we live in now. It has to stand up to a dierent level of scrutiny. MERS had never had a regulatory visit before last year. When they came in, they didnt say, What you did was terrible. If anything, the regulators got convinced that we do has value. But they said, If its going to have value and youre going to use it, it has to meet these criteria because youre a critically important back oce function to banks. Weve never been held to that standard before. So its a legitimate question, although what I would say is that servicers were not necessarily operating o of the MERS database. They were operating o their own databases. I dont think this was causing bad outcomes to consumers or anybody else. I just think it was a looseness in the process that subjected us to criticism, which can be xed. Going back to the consent order, where do we stand on that? Weve really made enormous progress. The boards have been reconstituted. The management team has largely been reconstituted.

At the senior management level, weve brought on a head of communications, a new CEO, a chief risk ocer and head of HR in the past four months. Beneath that, we brought in a new person to run our quality assurance function and a new person to run IT. Thats a second bucket of what the regulators were looking for so well have more strength and oversight at the senior level. Beyond the board and management, weve really enhanced the whole QA and data integrity processes. Our defense has never been in any of these court cases or even in the cases of public appeal that its OK that we did something wrong and were going to do it better tomorrow. Weve always felt and still feel today that the grounding of the MERS business model is correct and lawful. What were doing right now is more supporting the infrastructure that stands behind that. One of the key things, if theres one thing that makes me really feel good about all the challenges that weve had and xing the regulatory issues and these legal cases, is if you look at the business and the business model as it stands today, MERS has the same market share that it did a year ago. Were still operating in 50 states. We havent lost any of our members. We havent lost a nickel to an adverse judgment or award. So the business model that we have put in place here has really continued unfettered through the regulatory and legal challenges. But that doesnt mean we havent had to change some of the processes. In Michigan, we lost the appeal on foreclosure by advisement. For now, at least, thats a way we cant do things. Well we werent planning on doing things that way anyway. We were already moving out of foreclosures in our name. We have had to adapt, but in terms of the core business model and our value to customers, thats continued strong.

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Is the MERS System still a viable component of the mortgage industry? Whats the alternative? Is the alternative to go back 20 years and start recording these things on paper again? There is no good alternative. MERS was formed for a valid purpose. There were challenges with the accuracy, timeliness and cost of paper-based recording. None of that has changed, so that value proposition is as true today as it ever was. I would even argue its more true today. While the securitization market has slowed down a little bit, lenders need more exibility rather than less in where loans can be disposed of. Take Citi. There was a time when we would originate a loan and say this is a Citi loan, its going to go into Citis servicing and stay on Citis books or stay in a Fannie/Freddie securitization forever. Then all of a sudden, times got tight and we had to start deciding whether we wanted to sell o loans or sell o servicing. I think having that exibility you get using MERS is perceived as more of a value, not less, than ever before. Yes, there have been some challenges to the governance related issues at MERS, but were xing those and the underlying business model hasnt changed at all. If anything, its more important than ever. Recording ocials who are critical of MERS, like Massachusetts John OBrien Jr., believe the problems of 15 years ago have been addressed with e-recording and other technology that enables them to handle a large volume of activity without MERS. Meanwhile, the industry is experiencing a decline in new originations and securitizations, so fewer loans are being recorded. Why not phase out MERS? The OBriens of the world are talking about the way theyd like the world to be, not the way it is. The idea of going to 50 dierent state processes for recording every assignment is a huge step back. It doesnt make sense. Theres no analogy for it in modern commerce.

When you think of the mortgage industry, its one of the more robust nancial transactions and nancial-intensive industries in the country. And yet every other industry has adopted e-commerce and standardization as a way of doing business. This hasnt yet. The property recordings were never meant to be a robust source of consumer information. Theyre not today and they werent before MERS existed. If MERS wasnt here, they still wouldnt be. Its recording a lien between two commercial counter parties. This concept that if you had recorded all the assignments, consumers would know who their true owner and servicer are isnt the case. The note isnt recorded, so it wouldnt have solved the issues people are bringing up. Theres also the cost piece of it. Recording all of these interim assignments that arent required by law, would add cost to the mortgagee that isnt there today which is passed down to the person in the form of lower mortgage costs. So rst, youd have a rise in mortgage cost. And second, people like OBrien talk about all the revenue that was lost. Well, recordings were not supposed to be a prot center for the state. Typically a $35-$40 recording fee went to covering the states costs. This is not a huge prot center to the state that weve taken away, nor is it clear that in the vast majority of states, they could handle the volume. But if recorders set lower fees based on the expectation of handling multiple assignments and then they dont generate that revenue because of MERS, dont they have a valid argument that the lost revenue impacts their ability to cover costs? Do they have to raise their fees to generate the same revenue from fewer recordings and assignments in order to cover expenses? Why should they add revenue for something thats adding no value? Its essentially just a tax on the mortgage that adds no substantive value to the consumer or the industry.

The only reason to do that, if theyre not increasing their costs, is as a tax for the benet of the state. So call it what it is. Im not sure how that adds value to the process or the transaction or make the home buying process more aordable. Its really not. And as far as the information being out there, anybody can come to our website and get that information for free in a lot easier way than having to go down to the county courthouse. How does the disparate level of technological capabilities among recording oces impact the viability of MERS? There are thousands of counties and each one of them has their own processes. Some of them are electronic. In that particular case, it probably doesnt cost them that much more for assignments and that assignment might generate additional revenue for that state. One could argue whether that should be a revenue generation tool or a lower cost of assignment, but thats a policy question. But I will tell you its not universal and the vast majority of the counties have not invested in people or systems to get that process done. Whether its in a renance boom or other cases, you might experience backlogs. But to ask the question in reverse, why would we ever want to reinvent the process thousands of times on a local basis when youve got a national answer that works and results in lower costs for consumers? You have something that works effectively for 60% of the market thats backed by the customers of that system. The customers of the system are not the individual homeowners and theyre certainly not the county recorders. The customers are the person whos got the lien and the person whos got the note, and theyre both pretty darn happy right now.
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If the critics who want these assignments recorded arent considering the diculty of managing thousands of county requirements, is a better solution to nationalize MERS and establish a countrywide standard for land recording? No. The answer could be that. But I go back to why? Why are we xing something thats not broken? You have two willing parties, the note holder and the person who has the security interest who are happy with this system. They are all members with us. You have a price that works for them, that makes their business model work and it makes it less expensive for them to oer mortgages. Its oered nationally at scale. So if you could nationalize it, do you think the government could actually do whats being done by a 60-person company for $13 for the life of the loan as reliably? Ive never seen an instance where the government could take it over and run it more eectively, more reliably and with a higher customer satisfaction that can be done privately. What is the relationship of MERS with land recorders? We have a challenge addressing them because of the reasons you said. Most local municipalities and local regions are really pressed for dollars right now and this is a place where they would love to see more dollars. So I get that. But to the point of should this be done nationally, I keep reading some of the critics saying, Well who gave them the authority to go do this? We dont need the authority. Were following the law. The law gave us the authority. Thats why were following the process. We have two willing counterparties who are happy to have it done this way and it is part of the consumers transaction that were going to do it this way. Its not done in stealth, though Id agree that its a few words in a fairly voluminous and complex document.

I think we have a challenge with county recorders because theyve latched onto this concept of revenue and I think a misguided sense of accuracy for information. But if you go back to it, if MERS wasnt here, note information would not be recorded. Fannie and Freddie assignments would not be recorded and theyre the vast majority of the mortgage industry. Its not as if, as you read in the press, that MERS has somehow shielded or shadowed or made useless the hundreds of years worth of county recording records. The world is dierent now than it was 200 years ago. I still think that part of our challenge is both a little bit the press, but also, some of the county recorders are still working o the notion that somebody makes a loan and they record it and it kind of stays that way, where you should be able to hang on to it through the trail at each step. Thats a little bit dierent than the way the industry works. The industry moves at a fast pace. The note is moving one way and the servicing rights may be moving a dierent way and the actual servicing may be subserviced in a dierent place. Its very complex. The cover of the May issue of Mortgage Technology was MERS 2.0 vs. Life After MERS. The story explored the debate over the future of MERS. What do you think is the future? Clearly, its MERS 2.0. Were not done yet, but in terms of that vision and model, I think were already there. The reality is our board, Fannie, Freddie and the top servicers, in order to even get to the point of us having a consent order, the regulators looked them in the eye and said, If you want to use this company, you have to sign up for the changes you need to do and they have to sign up for the changes they need to do to really make this work right going forward. Are you willing to do that? And they all said yes, we said yes and the regulators bought in.

Weve been marching down that path now for several months and our members have started their reconciliations. We started the process in July of doing some independent reviews. Weve hired rms to help us and weve hired sta here. We understand what its going to take to succeed in a world with a higher level of scrutiny and discipline. And we know how to do that. Thats one of the reasons I came here. That parts not rocket science. I still think we have to work our way through the legal challenges and even if we get through the legal challenges, there will be some legislative challenges. There are some people who are going to say even if it is legal, I dont like it; it shouldnt be that way. Thats one of the larger communication and education opportunities and to some degree, threats if we dont do it really well, that exists. I feel pretty good about the regulatory piece. I feel good about the way the organization is moving and the support of the boards and members. I feel pretty good, not exceptional, but there are good days and bad on the legal front. Even there, were getting a lot more wins than losses and were OK. Were moving forward. But I keep coming back to what is the alternative? What is the life after MERS? If this model doesnt work, there are only two outcomes I could see. One would be a nationalized approach. Personally, I think thats nuts. Why would you go that route when youre already 60% of the way there with something the regulators and the constituents say is OK? I know there are critics who dont say that, Im very mindful of that. I see it every day in the press and in other places. The other alternative is going backwards again. Going backwards may not be going back 15 years or 20 years, maybe its only going back a few years because some counties have come up to speed and the ones who have come up the fastest have the biggest constituencies. But its very uneven.

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Why would you ever want to go back to a situation where you have 50 people inventing and investing in the same systems and dierent processes? That adds cost and complexity to the process thats going to get passed on the consumer in the end. Its going to be harder to comply to, rather than easier. So I really believe this concept, not only do I believe in it, its what were executing and doing today. What is the state of the MERS eRegistry? Were excited about the eRegistry. Its kind of a natural evolution for a company like us. When I talked about our strengths, the concept of bringing e-commerce and having the large backers and connectivity to the systems, I think that all plays into the next generation, which is how do you take paper out of the process, how do you help to standardize things, and the eRegistry falls naturally into that space for us. That said, what Ive seen on customer calls with six dierent organizations, every one of them was asking about and had an interest in the concept of e-notes and the eRegistry and how that might help them from a couple of perspectives. One is really getting paper out of the process. The second is adding a bit of uniformity to the process. Theyve all focused on control and compliance given that theyve been banged over the head so hard with it. This actually adds, not takes away control from the process. Then of course, cost. They understand that theyre going to be living in a world right now with higher compliance costs and lower mortgage volume for a while. So they understand theyre going to be competing for a smaller piece of the universe. So are servicers and originators seeing the heightened regulatory environment as an opportunity to make the shift to e-mortgages? Theyre see it more as forcing them to evaluate things that will give them more control and lower costs.

Heres the ip side of that coin; despite the fact that its a new product and had been growing pretty quickly, weve also seen the growth slow this year. For the existing customers, its slowed because the market has slowed. But there also havent been a lot of new customers joining. I think its for the understandable reason that all the big guys and most of the small guys have taken 100% of their system and project resources and focused them on the core business. The eRegistry is one of our sweet spots for future growth. Weve seen it grow at a normal pace, but unfortunately for us, not at the exponential growth wed hoped for. In a way, thats good. It may sound self-serving, but we needed the time, too. I like to relate it to making sure the foundation is good before we start building additions on the house. One of the lesser-publicized requirements in the consent order is a review of the eRegistry. What has that review found? We havent completed it yet. But the regulators didnt nd anything that gave them concern over the eRegistry. Why they asked us to do the review for is because they found issues in the core business. This really isnt our core business and they didnt really take a look at it. They want us to take a look at it and make sure its OK, too. What do you think the review will nd? Will there be opportunities to improve quality control measures like with the MERS System? We dont believe so. Anytime you pay somebody a lot of money to do a review, Im sure theyll come up with some recommendations, but that process was done fairly recently. The eRegistry is a bit dierent than the MERS database. eRegistry is a system of record and because its a system of record and because Fannie and Freddie and other investors are on it, its gone through some pretty rigorous reviews.

We started it with a legal opinion and its been through some fairly rigorous reviews or else Fannie and Freddie wouldnt be accepting us having the system of record. So Im not expecting that were going to run into any issues. If the eRegistry was designed with more controls, is there crossover in policies and procedures that can be used in the MERS System? I still think theyre a little bit dierent. The standards and the focus on something thats a system of record for transactions is going to have a higher level of scrutiny, review and focus because theres commerce dependent on it. If something fails, you potentially put the principal at risk. Thats going to have a dierent level of scrutiny than a registry thats basically a copy of a database. But the same lessons that were applying to the core businessthe sta, the documentation, the being able to prove it, making sure that if were working through our policies and we have the right resources to make sure to follow up when theres an errorall those same kinds of lessons learned that were now applying to the core business are going to apply to our entire business model. Six to 12 months from now, we as an organization walk out stronger overall. Even if eRegistry were perfect, the fact that people have some discomfort over MERS right now and were under this consent order, that may give people some cause to say, Should I build my future infrastructure on this foundation until Im comfortable with this company? While I dont have any specic concerns over eRegistry, the fact that were shoring up the whole organization and saying, This is MERS 2.0. Its solid. Its something thats been reviewed by the regulators and all the servicers. You can feel comfortable putting your Originations 2.0 on our MERS 2.0 and youre going to feel good about it. I think its going to help the whole business.
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CERTIFICATE OF COMPLIANCE This brief complies with the rules of court that pertain to the filing of briefs, including, but not limited to: Mass. R. A. P. 16(a)(6) (pertinent findings or memorandum of decision); Mass. R. A. P. 16(e) (references to the record); Mass. R. A. P. 16(f) (reproduction of statutes, rules, regulations); Mass. R. A. P. 16(h) (length of briefs); Mass. R. A. P. 18 (appendix to the briefs); and Mass. R. A. P. 20 (form of briefs, appendices, and other papers).

_____________________________ Marie McDonnell, Affiant