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1
HOUSE RESOLUTION

 
2    WHEREAS, The mortgage foreclosure crisis deepened after it
3was disclosed that several large home mortgage lenders utilized
4procedures that were legally insufficient to support
5foreclosures; and
 
6    WHEREAS, After problems were revealed about the manner in
7which foreclosure affidavits were processed, the uncertainty
8about the true ownership of mortgages, and the questionable
9legal standing of the entities that initiated foreclosure
10proceedings, 2 of the nation's largest residential lenders
11announced that they were each beginning a self-imposed mortgage
12foreclosure moratorium; and
 
13    WHEREAS, Although this crisis has its origins in numerous
14events, practices, and policy decisions, a central element of
15the foreclosure problem is the Mortgage Electronic Registry
16System (MERS), an electronic registry of land records which was
17created in 1998 by the Federal National Mortgage Association
18(Fannie Mae), the Federal Home Loan Mortgage Corporation
19(Freddie Mac), and several large U.S. banks; and
 
20    WHEREAS, Today MERS is listed as the agent for mortgage
21lenders on documents for 65 million home loans, which represent
22about 60% of the mortgages in the United States, and is the

 

 

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1agent for about 97% of the home mortgages created between 2005
2and 2008; and
 
3    WHEREAS, Although MERS boasts on its website that it
4"simplifies the way mortgage ownership and servicing rights are
5originated, sold and tracked" which "eliminates the need to
6prepare and record assignments when trading residential and
7commercial mortgage loans", housing counselors and advocates
8have documented patterns of abuse and fraud by mortgage
9servicers that utilized MERS; and
 
10    WHEREAS, Joining MERS at the center of the foreclosure
11crisis is the practice of "robo-signing", the process of
12generating thousands of affidavits often by unskilled and
13unqualified employees who neither read nor certified the
14underlying documents, which are used to obtain summary
15judgments in foreclosure proceedings; and
 
16    WHEREAS, Since a large volume of mortgages were digitized,
17there have been countless instances of original promissory
18notes being lost or misplaced; in lieu of producing the
19original promissory notes in the foreclosure proceedings,
20servicers simply provided "robo-signed" affidavits that state
21that the loan servicers own the notes; and
 
22    WHEREAS, Court records in mortgage foreclosure cases have

 

 

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1documented egregious examples of: falsified documents; "fee
2padding"; misapplication of mortgage payments; and improper,
3unnecessarily expensive insurance assessments, which, in turn,
4precipitated defaults on otherwise up-to-date loans and wholly
5improper mortgage foreclosures; and
 
6    WHEREAS, The effect of all of these problems and the
7resulting consumer confusion cry out for a nationwide
8moratorium on pending and new mortgage foreclosures;
9therefore, be it
 
10    RESOLVED, BY THE HOUSE OF REPRESENTATIVES OF THE
11NINETY-SEVENTH GENERAL ASSEMBLY OF THE STATE OF ILLINOIS, that
12we urge Congress to enact legislation that creates a mortgage
13foreclosure moratorium to allow a thorough review of
14foreclosure actions, provide meaningful opportunities for
15homeowners to renegotiate their mortgages so as to avoid
16foreclosure, enact further reforms, and allow the entire
17housing market to return to normalcy; and be it further
 
18    RESOLVED, That suitable copies of this resolution be
19presented to President Barack Obama, the Speaker of the United
20States House of Representatives, the President pro tempore of
21the United States Senate, and each member of the Illinois
22congressional delegation.