A Westlake Village attorney is asking a judge to rip up a homeowner’s mortgage and strike down the legal framework the lending industry uses to foreclose on notes that have been sliced, diced and sold so many times that it’s impossible for borrowers to tell who owns them.
John Larson filed a lawsuit in Ventura County Superior Court on behalf of Sam Palmer, a senior citizen in Thousand Oaks facing foreclosure on an $862,000 home loan. The defendants are a number of loan servicers and MERS, or Mortgage Electronic Registration Services.
In recent months, more than a dozen suits have been filed in the Tri-Counties naming MERS as a defendant, but the Palmer case questions MERS’ role most deeply.
Larson’s complaint argues that the only parties with the right to foreclose on the mortgage are the thousands of investors who ended up owning Palmer’s loan and whose names are nowhere to be found in the Ventura County Recorder’s Office or in any other public record.
Those investors, Larson alleges, are known only by numbers inside a computer system with accounts controlled by Goldman Sachs, Deutsche Bank and other Wall Street giants. He wants Palmer’s mortgage erased unless the investors come forward.
“Forfeiture is what [lenders] fear the most,” Larson told the Business Times. “It’s the worst thing that can happen to a lender during one of these quiet title cases.”
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