As we move into the New Year, our friends in the banking, servicing, and title industries have hastily convened a conference call to deal with the latest MERS setback in court. It seems that when Fannie Mae sought permission to evict some folks from the home it had recently foreclosed, the local Jackson County Circuit Court Judge said “Fannie May Not.” As usual, Belial Bank’s devilish President and CEO, B.L. Zebub, moderates. He is joined by his trusted cronies to consider what to make of this decision coming out of sleepy Southern Oregon. In attendance with B.L. is his honest but naïve legal intern, Les Guile, who, of late, has developed a tendency to speak more freely. Could it be that a conscience stirs within this young novitiate, and that he is tiring of the Machiavellian personalities on these calls? Also in attendance is title industry hand-wringer Liz Pendens and her nemesis, Dee Faulting, of the default servicing industry. Damian Faust, Belial’s lead counsel and hatchet man is present, as is the Bank’s chief schemer and PR man, Kenneth Y. Slick III (aka “KY”). B.L.’s loyal secretary, Lucy Furr, has dutifully transcribed this conversation, although she apparently forgot to “scrub” it, as instructed by B.L. As before, I am unable to disclose the source of this purloined post. – PCQ
B.L. Zebub: “I just read the decision in Federal National Mortgage Association vs. Goodrich. Well, the timing couldn’t be more prophetic; December 7, 2011 and we find out we just got bombed in court. Folks, I want to know what happened here! This was a little garden variety eviction. It can’t get much simpler than that. All the bank has to prove is their superior right of possession. We have our high-powered bank attorney flown all the way down to……..where is it “Jackson County” Orygon? Where the hell is that? Quick, someone, see if you can locate it on an AAA Trip Tik! I doubt it. Do they even have an airport there? Did we have to pay to have our attorneys chauffeured to court again?! That’s the problem – all those backwater bleeding heart liberal judges feeling sorry for the little guy! I had a bad feeling about this case the minute I found out it wasn’t going to be tried in Portland. It seems the farther away from the city you get, the more risk there is that some wild-eyed lib is gonna take issue with MERS. Remember what happened in the Flynn case? Where was that, Columbia County – wherever that is? Damien, enlighten us. What went wrong? I assume our lawyers take off their Rolex watches and Tiffany jewelry before they go to court. We don’t want these hayseeds thinking that we actually make a pretty good living foreclosing Oregonians out of their homes.”
Damien Faust: “B.L., it’s the same thing as in the Flynn case. The judge apparently just couldn’t get his head around the idea that Big Banks should be permitted to ignore Oregon’s mandatory recording of assignments law. He actually believed that it means what it says. We tried obfuscation, we tried subterfuge, we tried sophistry, we tried misdirection – nothing seemed to work. This Jackson County judge would have nothing of it. At least in Portland the judges like to engage in a little intellectual ping pong before they smash the ball at you. Out in the hinterlands, everything is black or white. They’re literalists. They do not view the world in shades of gray, like we do.”
Liz Pendens: “Well, at least you can’t blame this outcome on the title industry. I warned you during our last conference call that just because the James and Beyer decisions came down on the side of MERS, this chapter was still being written. But I can’t understand why Fannie couldn’t settle with Mr. and Mrs. Goodrich. If they would have offered them a deed-in-lieu, there would have been no title issue whatsoever. Even if they paid them a couple of bucks, it would have been far cheaper – and reputationally safer – than foreclosing and then trying to evict. Apparently the banks have lost view of the fact that it’s one thing to foreclose a “house” but it’s something else entirely to evict “human beings” – especially when you have to look them in the eye when you sign the Judgment of Restitution. Most judges feel differently about eviction. It’s a much more personal issue. You know there will be a sheriff at their door shortly. Fannie’s title was flawed solely because the foreclosing bank ignored ORS 86.735(1). Since the foreclosure was bad, the subsequent eviction was doomed to failure. You can’t illegally foreclose someone and then legally evict them. Fannie rolled the dice and lost. Hubris is a terrible thing to waste.”
K.Y. Slick: “Well, this must not stand. I say Fannie should appeal the decision and just tie these little homeowners up in knots for the next year or two. The homeowners in this case didn’t even have an attorney! We can out-maneuver these little pro se’ defendants, we can outspend them, and we can out-think them. I still believe Might Makes Right!”
Les Guile: “K.Y., that’s probably what Goliath said to his shield bearer as David walked toward them putting a single smooth stone in his sling.”
K.Y. Slick: “Don’t get Biblical on me Guile. Besides, I kinda like Philistines – not deep thinkers; materialistic, no strong social values; boorish. Those are exactly the sort of people we want on our side. Hell, some of our best attorneys are Philistines. They are more concerned with a pay check than a reality check. They don’t waste their time examining mores or worrying about the people they evict. They think “scruples” is a sexually transmitted disease and are just glad they don’t have them. We tell them to foreclose, they foreclose. We tell them to evict, they evict. They don’t ask why. They’re the “useful idiots” Lenin was referring to.”
B.L. Zebub: “Enough, OK?! You’re all getting sidetracked. And KY, I suspect Damien here would take issue with your description of our attorneys. He fancies himself as a real Renaissance Man. Before our last Christmas party I saw him furiously memorizing lines from famous trials so he could spontaneously pull them out of the air and impress the young ladies. So Damien, can we get you to finish telling us why this Jackson County Judge dropped a bomb on us and MERS?”
Damien Faust: “B.L. I can’t tell you why but I can tell you what he said. I only understand logic when it’s mixed with equal parts sophistry and misdirection. This guy just said what he thought. He basically found the bank’s explanation about MERS “confusing.” He allowed that MERS could be a “beneficiary” because the borrower’s trust deed said it was, but he nevertheless concluded that “…the process of mortgage assignment and recording under MERS does not comply with ORS 86.735(1).” He went on to say that the law “…envisions there being only one clear beneficiary of a deed of trust.” He appeared to take an oblique swipe at Judges Mosman and Stewart in the Beyer and James rulings respectively, when he wrote: “Decisions finding that the recording law has been followed engage in an incomprehensible and illogical attempt to explain how the deed of trust follows the note.” But he didn’t stop there. He wrote later in his opinion that “The decisions finding MERS a valid beneficiary simplistically take the language of the deed of trust at face value heedless that the underlying reality is more complex than envisioned by the law.” He held that “Under MERS, no one can be sure who holds the rights, and the courts and the public are expected to simply trust that arrangements made in secret are fair.”
Les Guile: Wow! So he didn’t have any problem with the form over substance arguments made by the bank attorneys that just because the trust deed recites that MERS is a beneficiary, it must be so. Judge Harris didn’t mince his words, did he? I’ve often wondered if some judge wouldn’t finally dismiss some of these pro-MERS arguments as just plain specious. This is like a breath of fresh air, rather than hearing a judge say that MERS is a beneficiary simply because the deed of trust says so – even though it gains no “benefit” from it. This reminds me of when Toto pulled back the curtain and revealed that the Wizard was nothing more than a lot of smoke and mirrors. I wonder if other judges will follow suit?”
K.Y. Slick: “Who are you rooting for Guile? You seem to forget which team you’re on. You should be badmouthing this decision like the rest of us, saying that Southern Oregon is populated with a bunch of pot smoking, bicycle riding, tree huggers that don’t have the intellectual bandwidth to appreciate the finely nuanced arguments of our high paid attorneys.”
Les Guile: “Well, K.Y., you shouldn’t be so dismissive of these folks. After all, don’t they have the Oregon Shakespeare Festival down there? I understand it’s really quite successful and attended by a lot of erudite people locally and across the country. Do you know anything about Shakespeare, K.Y.? I suspect not. I suspect you spent more time in the School of Moral Relativism than in the School of Arts and Literature.”
B.L. Zebub: “Huh! Les, I thought you had less guile, but now I’m beginning to wonder. Alright everyone! On that note, we’re going to end this conference call. I can see that the conversation has once again evolved into bickering and back-biting. Last time it was Liz Pendens and Dee Faulting. This time it’s K.Y. and Les Guile. Perhaps the next time we talk, we’ll have some happier news from our legal staff. It’s remarkable how a few successful Oregon foreclosures can brighten up a banker’s mundane existence. And next time, Dee, I want to hear your report on the latest hi-tech tool the banks and servicers are using to speed up their foreclosure processes. I understand your company has developed a cell phone app that can predict foreclosures before they happen. There’s just too damn many Oregonians hanging on by the skin of their teeth. We need to know who’s teetering on the brink of the foreclosure abyss, so we can give them a helpful “nudge.” I’m looking forward to hearing more about this new app. Isn’t technology a wonderful thing?”
“Lucy, as before, please transcribe this call, scrubbing the text where appropriate. I don’t know what we’d do if unexpurgated transcripts of our telephone conferences got into the wrong hands. That Oregon lawyer, Phil Querin, seems to have been wreaking havoc on our reputation lately, and I’d like to know what he’s up to. If I ever meet him, there will be hell to pay. Literally.”
“Oh, and K.Y., why don’t you go home and curl up in front of the fireplace and read Richard III. You’ll love him. I’m sure the two of you have a lot in common. Maybe you’ll even want to go to the festival in Southern Oregon this year. And if you run into the Judge that wrote the Goodrich decision, you can ask him what he was thinking. I suspect he won’t hesitate to tell you.”
