Editor's Note, July 25, 2012: This and other BankThink opinion columns written by Joel Sucher bearing this note, published between October 2011 and June 2012, mentioned the law firm of Stephen J. Baum, Litton Loan Servicing, or both. The columns should have disclosed that Baum's firm, working on behalf of Litton, had attempted to foreclose on the writer's property in 2009. American Banker's editors were unaware of this history at the time the columns were published.

Visit the office of John O'Brien, register of deeds in South Essex County, Massachusetts, and he'll eagerly show you stacks and stacks of documents. He calls it a crime scene.

Why? These documents, a plethora of mortgage-related assignments, were used as legal justification for evicting millions of families from their homes through a deeply flawed foreclosure process, enabled by the Mortgage Electronic Registration Systems industry consortium. There's nothing that gets O'Brien's Irish up more than a discussion of the rampant fraud he sees perpetrated on the court.

"In America we don't taken someone's home away with fraud," he says with a South Boston swagger and no-nonsense boom to his voice. "There was a Profiles in Courage moment for the administration when the five banks were brought to the table to answer for the robo-signing scandal, and they let it pass."  

O'Brien is in good company on this bully pulpit. Other registers like Jeff Thigpen of Guilford County, N.C., have taken up the cudgel, declaring that MERS has effectively bypassed centuries of property law (an inheritance from English common law) mandating that real property be recorded at the time of transaction in a place accessible to the public: a registry.

MERS, they say, has not only bypassed homeowners' right to know the status of their mortgage, but bilked the taxpayers out of quite a bit of cash that should have been paid as recording fees (the subject of a current Louisiana racketeering suit against MERS). 

(In a statement posted on its website, MERS argues that it "pays recording fees when the mortgage is recorded" the first time around, but when loans or servicing rights are subsequently sold there is no need to record another assignment. "Fees are paid for a service performed, and if a document is eliminated because it is no longer necessary, no fee is due because there is nothing to record.")

There are other profoundly disturbing implications: What about providing a clear title to a potential buyer of a foreclosed home? 

"I wouldn't want to be buying a foreclosure," O'Brien remonstrates, "then have the title examiner find that a robo-signer had participated in the process" 

Linda Tirelli, a bankruptcy attorney practicing in New York and Connecticut, still sees fraudulent documents entered into evidence, despite the robo-signing settlement. 

"I can dissect a bogus document in three minutes or less and find them in 98% of all cases," she says.

With projections calling for a drastic rise in foreclosure starts after the election, Tirelli feels that federal bankruptcy judges hold an important key to sussing out the fraud, and she's on a crusade to educate these judges on how the scam works. In the process, she's helped rid the profession of one of the worst legal fraudsters, notably the infamous (and now defunct) Stephen J. Baum foreclosure mill

In one of her cases, a 2008 Chapter 7 bankruptcy involving a JPMorgan Chase mortgage, Tirelli alleges that "there was a tri-lateral agreement between Chase, the Baum firm and LPS, and when there wasn't a verifiable chain of title, the Baum firm would send out the word that they needed an assignment to LPS which, in turn, robo-signed a document by an in-house staffer." (Neither LPS nor JPM commented by press time.) 

Tirelli, a graduate of O. Max Gardner's fabled "Bankruptcy Boot Camp," sees federal bankruptcy courts as future battlefields, maybe even a Waterloo for MERS, once there's a judicial eureka moment that this is a real, palpable problem of Teapot Dome/Watergate/Enron proportions.    

At the last conference of the International Association of Clerks, Recorders, Election Officials and Treasurers, O'Brien presented findings from an independent audit he commissioned from McDonnell Property Analytics. The study looked at 565 assignments in his registry that involved JPMorgan Chase, Wells Fargo and Bank of America during 2010. 

The frightening statistic in a nutshell: Only 16% were deemed valid.  Interestingly, the audit commissioned by Phil Ting, the San Francisco assessor-recorder, seemed to provide corroboration for this sad trend, revealing that that 84% of foreclosures from 2009 to 2011 in the Bay Area were based on documents that were severely flawed. 

So, for those of us trying to process what this means – extrapolating this evidence into a database of millions of foreclosures since 2007 – well, it may leave us all gasping for breath and headed down to the nearest pub to cry into our collective beers.

Both O'Brien and Tirelli agree that the specter of MERS will haunt us for quite some time. O'Brien, though, has found an unlikely ally. 

Invited to address a gathering of New Jersey Tea Partiers recently, the life-long Democrat was somewhat taken aback by the overwhelming support for his efforts. But, then again, the sanctity of property rights seems to connect many groups of disparate political inclinations.

In the wake of the settlement, O'Brien sent invitations to the CEOs of the five banks involved to come take a tour of his registry and examine the documents. Bank of America was the only one to respond, but offered an underling, not O'Brien's Massachusetts neighbor, CEO Brian Moynihan. 

"He could drive over here, and over coffee I could explain to him what his bank has done," O'Brien says. "Where I come from you sit across the table – one on one – talk, and try to resolve the problem." 

O'Brien is still waiting to hear from Moynihan.

Joel Sucher, a filmmaker with Pacific Street Films in Hastings-on-Hudson, N.Y., is working on "Foreclosure Diaries," a documentary.