I am meeting more and more individuals who are considering bankruptcy due to debt collection calls. Many times people say they want us to call Calls from creditors attempting to collect a debt are legal and an important part of the economy. However, debt collectors who call you 10 or 20 times a day, swear, threaten you with arrest or criminal prosection are violating the Fair Debt Collection Practices Act and the Kentucky Consumer Protection Act.
Proving you are being abused requies documentation and patience. Attached is a link to the collection log I give to my clients to keep track of collection calls and mailings.
There is no reason for you to dread answering the phone or going to the mailbox.Read More
The Holidays are a time of year when consumers make purchases on their credit cards only to discover in January that their is not enough money in the budget to cover the amount charged. As you are walking around shopping centers it is a good practice to keep a journal of how much you are charging on your card. This allows the spending to be defined and calculated– instead of the first number you see being attached to a minimum payment.
In March of 2009 the Arkansas Supreme Court issued an opinion regarding the standing of Mortgage Electronic Registration System, (MERS) to file foreclosure cases on behalf of the owner of the note. Below is a article written by Kathleen E. Kraft of Thompson Coburn, LLP in Washington, DC. Around the country MERS is skilled an molding itself to fit the facts of a given case.
Another Nail in the MERS Coffin: Arkansas Court Rules That MERS Was Not a Necessary Party to a Foreclosure Action in Which MERS Served As Lender’s Nominee on the Senior Deed of Trust By Kathleen E. Kraft.
On March 19, 2009, the Supreme Court of Arkansas determined that Mortgage Electronic Registration Systems, Inc. (MERS) was not a necessary party to a foreclosure action involving the foreclosure of a junior mortgage, where MERS was not the true beneficiary of the senior deed of trust nor was specifically authorized by the lender to act on the lender’s behalf in the foreclosure proceedings. Mortgage Electronic Registration Systems, Inc. v. Southwest Homes of Arkansas, – S.W.3d –
2009 Ark. 152, 2009 WL 723182 (Mar. 19, 2009). Coming in on the heels of Landmark National Bank v. Kesler, 40 Kan. App. 2d 325, 192 P.3d 177
(2008) (also finding that MERS was not a necessary party to a foreclosure action), Mortgage Electronic Registration Systems, Inc. v. Southwest Homes of Arkansas places MERS on unstable ground in mortgage foreclosure actions.
In 2003, Jason Lindsey and Julie Lindsey entered into a deed of trust on a one-acre lot in Benton County, Arkansas, to secure a promissory note from Pulaski Mortgage. The deed of trust listed Pulaski Mortgage as the lender, Jason and Julie Lindsey as the borrowers, James C. Ernst as the trustee, and MERS as the beneficiary “acting ‘solely as nominee for Lender,’ and ‘Lender’s successors and assigns.'” In 2006, Jason and Julie Lindsey granted a mortgage on the same property to secure a second promissory note from Southwest Homes of Arkansas (“Southwest Homes”). In 2007, Southwest Homes filed a Petition for Foreclosure in Rem against the Lindseys under the mortgage and listed the Lindseys, the Benton County Tax Collector and “Mortgage Electronic Registration System, Inc.
(Pulaski Mortgage Company)” as respondents. Southwest Homes served Pulaski Mortgage, but did not serve MERS. A decree of foreclosure was entered in April 2007, and the property was auctioned to Southwest Homes. The sale was approved in May 2007. In 2008, MERS learned of the foreclosure and moved for relief. The circuit court denied MERS’s motion, and MERS appealed.
MERS argued that it held legal title to the property and therefore was a necessary party to any action regarding title to the property. Although the deed of trust indicated that MERS held legal title and was the beneficiary and nominee of the lender, it also provided that all payments were to be made to the lender, that the lender would make decisions on late payments, and that the lender held all rights to foreclosure. The borrowers never made payments to MERS and MERS did not service the loan in any way. MERS simply provided electronic tracking of ownership interests in residential real property security interests.
Still, MERS asserted that it held bare legal title because it held the authority, as an agent of the lender, to exercise the rights of the lender, regardless of who the lender may be under the MERS electronic
The court found that MERS did not hold legal title under the deed of trust and therefore was not a necessary party to the foreclosure action initiated by Southwest Homes. In its decision, the court described the relationship between parties to a deed of trust-the borrower, who conveys legal title to the trustee; the lender, who is the beneficiary of the deed of trust and holds the indebtedness secured by the deed of trust; and the trustee, who takes legal title and whose duties are limited to undertaking foreclosure upon default and reconveying the deed of trust upon satisfaction of the underlying debt. Because MERS was not the trustee under the deed of trust, the deed of trust did not convey legal title to MERS. Also, MERS was not the beneficiary of the deed of trust, although so designated in the deed of trust, because it did not receive the payments on the underlying debt.
Chief Justice Jim Hannah authored the opinion. Justice Danielson authored a concurring opinion, in which Justices Imber and Wills joined.
Justice Danielson’s concurring opinion discusses the Kansas Appellate Court opinion in Landmark National Bank v. Kesler.
1. The court specifically rejected this argument, stating, “We specifically reject the notion that MERS may act on its own, independent of the direction of the specific lender who holds the repayment interest in the security instrument at the time MERS purports to act.”
Kathleen E. Kraft is an associate with Thompson Coburn LLP, 1909 K Street N.W., Suite 600, Washington, D.C. 20006, where she concentrates her practice in the areas of business bankruptcy, corporate restructuring and creditors’ rights. She is a member of the American Bar Association, the American Bankruptcy Institute and the Walter B.
Chandler American Inn of Court. She can be reached at firstname.lastname@example.org; 202-585-6922 (ph) or 202-508-1035 (fx).Read More
Today is the first day of blogging at KY Consumer Law Group. com. KCLG is a consumer rights firm dedicated to protecting kentucky consumers from illegal actions of debt collectors.
At present the United States is experiencing one of the most difficult recessions in history. Financial problems are the rule and not the exception. Debt Collectors and Mortgage companies are entitled to collect on funds owed to them– but they must do so with TRUTH, HONESTY, FAIRNESS AND DIGNITY.
Because someone is owed money they are not entitled to treat you unfairly. Thanks again for visiting the site and the blog.