Mark J. Malone on MERS

You can find Professor Christopher Peterson’s working draft of Two Faces: Demystifying the Mortgage Electronic Registration System’s Land Title Theory by Christopher L. Peterson here.  Below is a letter to Professor Peterson from boot camp graduate Mark J. Malone in response to the working draft.

Professor Peterson,

I am a former federal prosecutor and present National Association of Consumer Advocates member providing pro bono representation in connection with Legal Services of New Jersey’s Anti‐Predatory Lending Project. I’ve read your recent working draft TWO FACES: DEMYSTIFYING THE MORTGAGE ELECTRONIC REGISTRATION SYSTEM’S LAND TITLE THEORY in which you describe MERS’s corporate structure as “so unorthodox as to arguably be considered fraudulent.”

Your article does not reference an April 7, 2010 deposition of MERS corporate secretary William Hultman, the MERS officer personally responsible for creating an army of phony MERS officers around the country. This Hultman deposition shows that the MERS corporate structure is fraudulent. (A copy of the April 7, 2010 Hultman deposition transcript is attached. Let me know if you want all of the exhibits.)

MERS functions to disguise the true owners of mortgages and promissory notes around the country. If an organized crime family set up a shell company to disguise ownership of its assets in the same manner MERS does, a prosecutor would label the incorporation an overt act in furtherance of a money‐laundering conspiracy.

Moreover, Mr. Hultman does not even have a colorable claim to authority to appoint foreclosure mill lawyers as MERS officers. The MERS Board never authorized Hultman to appoint foreclosure‐mill lawyers as MERS officers. Instead Hultman relies upon a resolution passed by a defunct corporation that gave Hultman limited authority to appoint employees of MERS members as certifying officers. The present MERS Corporation never adopted the resolution of the dead corporation. Law firms are not MERS members, so Hultman’s effort to grasp this straw must fail.

To appoint attorneys around the country as MERS assistant secretaries and vice presidents, Hultman falsely prepares a document in which he certifies that the document is a “true copy of a Resolution duly adopted” by the MERS Board of Directors. His certification is false because there is never an original resolution. A representative copy of the “true copy” of the “Corporate Resolution” used by Hultman to appoint thousands of make‐believe MERS officers is attached as Hallinan Exhibit 2. Mr. Hallinan is a partner in Phelan, Hallinan & Schmieg (“PHS”), a law firm that executes thousands of MERS assignments of notes and mortgages each year in Pennsylvania and New Jersey.

In the attached Hallinan Exh. 2, Hultman certifies “that the foregoing is a true copy of a Resolution duly adopted by the Board of Directors of said corporation” where the foregoing states: “Be it resolved that the attached list of candidates are employee(s) of [the law firm] and are hereby appointed as assistant secretaries and vice presidents of Mortgage Electronic Registration Systems, Inc., . . .”

The evidence shows that the MERS Board of Directors never met to consider a motion to appoint the PHS attorneys as MERS officers. The Board never voted to make the appointments of the PHS attorneys as MERS officers. No original Board resolution exists appointing these lawyers as MERS officers. In short, Mr. Hultman’s “true copy” of the alleged “Corporate Resolution” duly adopted by the MERS board is a hoax.

Hultman’s certification is knowingly false because he knows the Board never met to consider the appointment of the lawyers. Hultman knows the Board was never presented with a resolution to make the appointment. Hultman knows the Board never voted on the appointment. Hultman knows there is no original resolution memorializing the Board’s resolution. Therefore, Hultman’s certified “true copy” is a knowing falsehood.

Mortgage Electronic Registrations System, Inc. (“MERS”) was incorporated effective January 1, 1999. It is a shell company without any employees and assets, but as the MERS CEO, R. K. Arnold, recently testified before Congress, it has 20,000 officers. Going back to 1995, the present company is the third company with the same name, but the earlier named MERS companies had employees and assets. MERCORP, Inc. is the present name for the second MERS, having taken the new name effective January 1, 1999.

The first MERS Board (1995 thru June 30, 1998) passed a resolution on April 9, 1998 delegating authority to Hultman to appoint as MERS “certifying officers” employees of MERS members. That corporation ceased existence on June 30, 1998.

Hultman claims that this 1998 Board resolution by a similarly named corporation twice‐ removed from the present‐day shell company authorizes him now to appoint lawyers of non‐MERS member firms as vice presidents and assistant secretaries. The actual 1998 Board Resolution documents expose the deceit of Hultman’s claim.

∙ The agenda for the April 9, 1998 regular meeting of the Board of Directors of Mortgage Electronic Registration Systems, Inc. referencing a proposed resolution for granting the Secretary authority to appointment of employees of MERS members as Certifying Officers is attached as Hultman Exh. 30.

∙ The minutes for the regular April 9, 1998 meeting of the Board of Directors of Mortgage Electronic Registration Systems, Inc. memorializing that “By Motion made, seconded and passed without objection, the Board approved a resolution authorizing the Secretary of the Corporation to approve Certifying Officers of the Corporation,” are attached as Hultman Exh. 31. These minutes are signed by Hultman.

∙ The April 9, 1998 “Corporate Resolution of Mortgage Electronic Registration Systems, Inc. authorizing the Secretary to approve nominations of members of their respective certifying officers of MERS without prior approval of the Board of Directors is attached as Hultman Exh. 32. This exhibit includes a December 20, 2002 Certificate signed by Hultman “certifying that the foregoing is a true copy of a Resolution duly adopted by the Board of Directors of said corporation at a meeting duly held on the 9th day of April 1998 at which there was a quorum . . .”(etc.) The second page of the Exhibit is blank corporate resolution referencing the appointment of an employee of a MERS member as a certifying officer.

Before, during and after his April 7, 2010 deposition, Hultman was not able to produce any document showing the present Board of the MERS shell company ever adopted the April 9, 1998 resolution of an earlier company that went out of business before the present company was created and coincidentally had the same name as the present shell company. Presently, it appears the MERS Board of the shell company has never even met. Moreover, the bylaws of the shell MERS Corporation restrict the appointment of vice presidents and assistant secretaries to the MERS Board.

Whatever the merits of Hultman’s claim that he was delegated authority to appoint MERS officers, the fact remains that his “true” copies of non‐existent Board resolutions appointing attorneys as corporate officers are false. If the “true copy” of the corporate resolution certified to by MERS Corporate Secretary William Hultman appointing the lawyers as corporate officers is a hoax, shouldn’t a court (1) enjoin the practice of initiating foreclosures based on assignments created by the impostor officers, (2) enjoin the practice of recording the bogus assignments in the county land records and filing lis pendens based on the assignments, and (3) enjoin the use of the bogus assignments in uncontested foreclosure cases processed through the court system?

Mark Malone