Background. As mentioned in an earlier post here, the Niday case, which I have previously commented on here and here as it was winding its way up the appellate process, and its companion case, Brandrup, were recently decided by the Oregon Supreme Court.

GavelIn a important decision on the future role of MERS in Oregon’s non-judicial foreclosure process, the Oregon Supreme Court answered four certified questions that had been submitted to it.  Herewith, verbatim, is a copy of the media release.  This is not the court’s written opinion.  The release contains a link to the official opinion. [Note: I changed the formatting slightly for readability. PCQ]

SUPREME COURT Media Release Contact: The full text of these opinions can be found at Stephen P. Armitage Staff Attorney (503) 986-7023

Cases decided June 6, 2013

Bart G. Brandrup, et al., v. Recontrust Company, N.A., et al., (USDC Case No. 311CV1390HZ, 311CV1399HZ, 311CV1533SI, 312CV0010HA) (SC S060281)

On certified questions from the United States District Court. The certified questions are answered. Opinion of the Court by Justice David V. Brewer. Justice Rives Kistler concurred in part and dissented in part, and filed an opinion in which Chief Justice Thomas A. Balmer joined.

Today, the Oregon Supreme Court issued an opinion answering four questions that had been certified to it by the United States District Court. The questions all pertain to the Oregon Trust Deed Act (OTDA) and how it is affected by the practice in the home mortgage industry of drafting mortgages and trust deeds so that a certain Delaware corporation, Mortgage Electronic Registration Systems, Inc. (MERS), rather than the lender, is identified as the security instrument’s “beneficiary.” The questions arose when home loan borrowers in four separate cases brought actions in state court against MERS and other entitles that were attempting to use the nonjudicial foreclosure procedures of the OTDA to foreclose the trust deeds securing plaintiffs’ home loans. In each case, plaintiffs sought to enjoin the foreclosure on the ground that a condition for nonjudicial foreclosure set out in ORS 86.735(1) — that any assignments of the trust deed by the “beneficiary” be recorded in the relevant county real property records — had not been satisfied. In each case, defendants removed the case to federal court and then filed a motion to dismiss under FRCP 12(b)(6), arguing that MERS was the lawful beneficiary under the trust deeds and that all assignments of the trust deeds by MERS had been recorded. Uncertain as whether MERS could be deemed the “beneficiary” of the trust deeds in question under the OTDA, and, if not, what role MERS could play under the statute, the United States District Court certified the following (reframed) questions to the Oregon Supreme Court: Continue reading “QUERIN LAW: Oregon Supreme Court Decides Niday and Brandrup”

As I was reading Kelly Harpster’s excellent article on The Housekeeping Report, summarizing the January 9, 2013 oral arguments on the Niday case[1] before the Oregon Supreme Court, I felt I was ringside with Howard Cosell covering an old Ali-Frazier title bout:

“Frazier hits Ali with a short left jab, followed by a quick right – Ali feints, dances, bobs, weaves – he laughs, drops his hands and mugs at Frazier, taunting him, then fires back with a flurry of punches to Frazier’s midsection.  Oh, there’s the bell!  That was the round 15[2]!  The ref jumps in to separate the two gladiators, who are exchanging angry words and gestures.  Their corner-men separate the pugilists, each side claiming victory.  Ladies and gentlemen, this is why they call it the “Sweet Science.”  Have you ever seen such a magnificent exhibition of the sport?  It truly was a “Thrilla in Manila!”  Now let’s go to the judges’ scorecards….” Continue reading “MERS, Niday, and Occam’s Razor”

My fondness for alliterations compels the title.  I could not resist.  The purpose of this post is to welcome Lake Oswego attorney extraordinaire, Kelly Harpster, to the blogosphere – that vast otherworld known as the Internet, where one can accomplish two respectable goals:  (a) Sharing important information on self-selected topics, and (b) doing so through the lens of our own personal  Weltanschauung.

Quite coincidently, Kelly and I commenced our solo practices at approximately the same time – early 2010.  We had both previously worked at the large Portland firm, Davis W right Tremaine.  As a further coincidence, almost immediately after opening our separate practices, we became interested – nay, fascinated – with the world of bank foreclosures, and the havoc being wreaked upon Oregon homeowners who found themselves in properties and debt from which an orderly retreat was nearly impossible.  For both of us, it became clear that the financial services industry, from Wall Street investment houses such as Goldman Sachs, to the lending and servicing industries, such as Bank of America, Morgan Stanley, and Wells Fargo – to name a few of the survivors of the crash of 3Q 2008 – were primarily responsible for what has become a foreclosure crisis of epic proportions.  While the Big Banks [my term] queued up to take billions of taxpayer-funded bailout money, distressed homeowners, awash in negative equity, were all but forgotten.[1]  It had become clear to us that the “Little Guy” [my term], was in dire need of help, legally and legislatively.  To that end, Kelly has worked tirelessly since starting her solo law practice.

Although, I had a head start in my blogging ventures, when in 2010, I impetuously leaped, like Hotspur, into the fray, I am pleased to see that Kelly has recently done so as well – albeit with more deliberateness – with “The Housekeeping Report – Oregon Mortgage and Foreclosure News.”  It is a welcome addition of useful, current, and reliable information for all who choose to visit.

For those who know Kelly, they know that she is smart…scary smart.  When, where, and how she has the time to devour the vast amount of knowledge and information she retains is something of a mystery.  Perhaps she is actually a twin, and together they masquerade as one. However she does it, it is accomplished with relish, and the results are immediately recognizable; she knows whereof she speaks.  So for folks who know Kelly, I am sure they are already enjoying her new website.  It is rich in valuable content, designed to inform her legal peers and help The Little Guy, at the same time.

And for those who do not know Kelly, I invite you to meet her vicariously, through the news and views she shares at The Housekeeping Report.  As I learned long ago at Davis Wright Tremaine, Kelly is what we called a “quick study.”  She grasps issues at warp-speed, synthesizes them into bite-size pieces, and adds a dose of hot sauce that is her [sometimes] wicked wit. Readers will not be disappointed.

Congratulations Kelly!  Welcome to the blogosphere!

[1] I acknowledge the government’s efforts through HAMP and HARP, but, in my opinion, they were doomed from the start, since bank participation was voluntary.  The remarkably poor statistical success of these programs bears this opinion out.  Clearly, the effort has improved over time, but one has to wonder whether it is now, too little too late.  [If “deservedness” for financial help was a criterion for distressed homeowners, who are required to submit “Hardship Letters” before receiving assistance, why were the Big Banks not required to do so, as well?  In fact, by all accounts, they received billions of bailout dollars whether they wanted it or not. – PCQ]

Slam! Bang!

HER:  “Honey, is that you? You’re home early from the firm. Usually, on Fridays, you go over to Lucifer’s Lounge with the other attorneys for shots of Devil’s Springs Vodka, and regale each other with stories of the families you foreclosed during the week. Honey?  Honey? What’s wrong?”

HIM:  “I think I screwed up….”

HER: “Was it a little, itsy, bitsy, ‘No one will ever know,’ mistake – or one of those ‘Where’s my passport’ mistakes?” Continue reading “Foreclosure Mill Morality”

In the late 1990s, without a single piece of enabling legislation, the Big Banks, infused with money, ego, hubris and a TBTF attitude, created MERS in order to electronically track securitized loans and avoid public recording fees.   But like Dr. Frankenstein, the Big Banks never fully realized the monster they were about to create.  The foreclosure crisis of the last five years has underscored the flawed logic of the MERS model.

In January 2013, the Oregon Supreme Court will, for the first time, hear oral argument on four certified questions dealing with MERS.  It can only be hoped that after five years of  litigation and millions of dollars in attorney fees, MERS will be quietly laid to rest in the Dustbin of Bad Ideas.  

Herewith, in anticipation of the upcoming ceremony, I reprise an Ode to the star-crossed lovers most affected by the Mess MERS Made

The Note and the Trust Deed had been married for years

The union was good, with very few tears.

They were always together, going hither and yon

But early one morning, the Trust Deed was gone.


Note searched for her lover, nearly out of her mind.

Soon her fears were confirmed – Trust Deed was assigned.

Unwilling to stop, she asked clerks far and wide

“Have you seen my dear Deed?  He must be inside!”


But recorders responded, “Have you not heard of MERS?

We no longer record – we haven’t for years.”

“The best you can hope for,” friends told the Note

“Is to check with the Registry – it’s your last and best hope.”


Then she remembered, with rising alarm

Those 18 small numbers, tattooed on Deed’s arm.

So she rushed to the Registry, and entered the MIN

With hope against hope, she’d see Trust Deed again.


When MERS finally replied, a cold day in December,

She learned Deed was assigned – but not to a member!

“Oh, what shall I do,” the Note softly cried,

“MERS took my dear Deed, but left me outside.”


The months turned to years, then one day through fate,

She saw him by chance – her wayward soul mate.

Her Trust Deed looked terrible; he’d developed a paunch,

Seems he’d wasted away, in some low level traunche.


“Oh Trust Deed, my Trust Deed, return home to me.

Wherever I go, is where you must be.”

But Trust Deed responded, holding Note very tight,

“Dear, the law says once split, we can never unite.”


Now lawyers will argue, with logic askew,

That MERS didn’t cause the split of these two:

“They were just being strawmen – why can’t you all see?

MERS isn’t to blame – they’re just ‘Nominees.’”


But truth is the truth, it cannot be denied,

MERS is the reason, they’re not side-by-side.

Following a rough and tumble year in the banking industry, Belial Bank’s feckless fearless leader, B.L. Zebub, believes it is high time to bring some levity and loyalty to the lowly troops who have been tirelessly foreclosing all the Beleaguered Borrowers they may have missed the first and second time around.  Mostly, however, B.L. is concerned about the reputational damage his bank has suffered this year.  Once known as the largest bank in America as measured by hubris, it is at risk of losing this mantle of distinction.  On the Chinese calendar, 2012 has been Belial Bank’s Year of the Rat.

B.L. is hoping against hope to instill a sense of pride among the rank and file; he knows that his company’s  promise to the feds to install a “single point of contact” [or “SPOC”] for every borrower seeking help, has become a sham.  Problem is, after a couple of weeks on the job, the SPOCs either quit, get fired, or leave to take more respectable jobs in the collection and repo industries. And then there was the public relations nightmare Belial Bank suffered after it was disclosed to the press that the top brass were giving prizes to supervisors who could run up the highest number of SPOCs for a single borrower in the shortest amount of time.  Last week’s big winner, Art O. DeLay, won a hundred crisp dollar bills and the afternoon off to visit The Devil’s Den Gentlemen’s Club, conveniently located just down the street from Belial’s headquarters.  [Cover charge waived.] Continue reading “Belial Bank’s 2012 Holiday Planning Meeting”

This is the second installment of my article looking back over the past five years at Portland housing statistics.  Part One examined the real reason for the housing crisis which officially commenced in 3Q 2007, and looked at the historic numbers for average and median (i.e. “mean”) sale prices according to the RMLS™. The link to Part One is here

 The Rest of the Story. Besides pricing over the past five years, what about time on the market?  Available inventory?  Number of listings? Closed sales? Let’s look at each one:

1.     Time on the MarketUntil 3Q 2007, an overheated real estate market was still burning through inventory.  In August 2007, the average time on the market was 56 days less than two months from listing to “pending sale.”[1]  The following month, September, 2007, banks began realizing that the drumbeat of subprime defaults was not going away.  They tightened their underwriting requirements almost immediately.  Over time, they began to even restrict borrowers from tapping their HELOCs based upon ZIP code.  As short sales and REOs began to fill the real estate marketplace, buyers and appraisers began viewing the sales figures as legitimate comps by which to gauge present value.  All the while, many potential buyers remained on the sidelines, waiting for prices to hit bottom.[2]  Many sellers who were fortunate enough to have equity during the following five years had to decide whether to wait until the market turned, or sell their home and recover far less equity than they had earlier.[3] Continue reading “Portland Metro Housing Prices – The Last Five Years [Part Two]”

OK, I admit it!  I am suffering from chronic MERS fatigue.  Every few days, in some part of the country, MERS gets sued by someone.  Sometimes it involves a pending foreclosure; other times it involves some state or county suing to recover lost recording fees.  And the beat goes on. MERS apologists, aka the Big Banks and their toadies attorneys, appear before one judge or another with arguments so specious as to make intellectually honest lawyers grimace and intellectually dishonest lawyers grin. – PCQ

On Thursday evening, November 15, we learned through the Oregonian, that the Multnomah County Commissioners unanimously authorized the filing of a lawsuit against Mortgage Electronic Registry System, also known as “MERS,” which describes itself as follows: Continue reading “MERS Fatigue”

“Language and speech are the means by which people communicate with one another.  However, with the Big Banks, their silence conveys the loudest message.”  [Anonymous – sort of.]

In Part One, I analyzed the recent Oregonian article, titled: “Lenders not engaging in Oregon foreclosure mediation program.”  The gist of my post addressed the process under SB 1552 by which borrowers were intended to be helped under the law.  However, it seems that the Big Banks are refusing to participate in a major component of SB 1552 – the part dealing with “at risk” borrowers who have applied for mediation in an effort to find a “foreclosure avoidance mechanism” such as a modification, forbearance, short sale, deed-in-lieu or some other method to avoid foreclosure. Continue reading “SB 1552 – Why Don’t The Big Banks Wanna Play? [Part Two]”