CONTINUE READING DEPOSITION OF WILLIAM HULTMAN
CHIEF FINANCE OFFICER MERS
DEGNAN & BATEMAN
(856) 232-7400
Page 3
Page 1
SUPERIOR COURT OF NEW JERSEY
CHANCERY DIVISION - ATLANTIC COUNTY
DOCKET NO. F-10209-08
BANK OF NEW YORK AS TRUSTEE FOR
THE CERTIFICATE HOLDERS CWABS,
INC. ASSET-BACKED CERTIFICATES,
SERIES 2005-AB3
Plaintiff(s),
vs.
VICTOR and ENOABASI UKPE
Defendant(s).
___________________________________________
VICTOR and ENOABASI UKPE
Counterclaimants and
Third Party Plaintiffs,
vs.
BANK OF NEW YORK AS TRUSTEE FOR
THE CERTIFICATE HOLDERS CWABS,
INC. ASSET-BACKED CERTIFICATES,
SERIES 2005-AB3
Defendants on the Counterclaim,
and
AMERICA'S WHOLESALE LENDER;
COUNTRYWIDE HOME LOANS, INC.;
MORGAN FUNDING CORPORATION,
ROBERT CHILDERS; COUNTRYWIDE
HOME LOANS SERVICING LP,
PHELAN, HALLINAN & SCHMIEG,
P.C.,
Third Party Defendants
--------------------
April 7, 2010
Deposition of William Hultman
DEGNAN & BATEMAN
(856) 232-7400
Page 2
1 Oral sworn video/telephone conference deposition of WILLIAM HULTMAN, taken in the law office 2 of Morgan, Lewis, Bockius, 502 Carnegie Center, Princeton, New Jersey, before Michelle M. Downes, a 3 Certified Court Reporter and Notary Public of the State of New Jersey, commencing at 10:55 a.m. on the 4 above date, there being present:
5 LAW OFFICES OF JAMES F. VILLERE, JR. BY: JAMES F. VILLERE, JR., ESQUIRE
6 MARK J. MALONE, ESQUIRE
Attorneys for Ukpes as Defendants and
7 Third Party Plaintiffs
8 SOUTH JERSEY LEGAL SERVICES
BY: ABIGAIL SULLIVAN, ESQUIRE
9 Attorneys for Ukpes as Defendants and Third Party Plaintiffs
10
Via video conference in Washington DC:
11 GOODWIN PROCTER, LLP
BY: SABRINA M. ROSE-SMITH, ESQUIRE
12 Attorneys for Plaintiffs Bank of New York as Trustee for the Certificate Holders
13 CWABS, Inc. Asset-Backed Certificates, Series 2005-AB3 and Countrywide as Third 14 Party Defendants
15 MORGAN, LEWIS, BOCKIUS, LLP
BY: ROBERT M. BROCHIN, ESQUIRE
16 Attorneys for MERS
17 Via telephone:
18 WILENTZ, GOLDMAN & SPITZER
19 BY: DANIEL S. BERNHEIM, ESQUIRE
20 Attorneys for Third Party Defendant 21
22 Also present:
23 Judy Romano, Esquire (via telephone) 24 John Murphy, Esquire (via video)
25 Daniel E. Orr, Esquire
DEGNAN & BATEMAN
(856) 232-7400
Page 3
1 (By agreement of counsel, the 2 signing, sealing and certification of the deposition 3 were waived, and all
objections, except as to the form 4 of the questions, were reserved to the time of trial.) 5
6
7 E X A M I N A T I O N S
8
9 Witness Page 10 William Hultman
11 By Mr. Malone 12 12
13
14 E X H I B I T S
15
16 Exhibit Description Page 17 Hultman-1 MIN Summary 6 18 Hultman-2 MIN Milestones 6 19 Hultman-3
Signing Authority Agreement 6 20
Hultman-4 Corporate Resolution 6 21 Hultman-5 Bank of New York (Western
22 Trust) Membership application 6 23 Hultman-6 Countrywide Home Loans
24 Membership application 6 25 Hultman-7 Letter dated 11/1/09 6
DEGNAN & BATEMAN
(856) 232-7400
Page 4
1 Hultman-8 Letter dated 4/30/00 6 2 Hultman-9 MERS Terms and Conditions 6 3 Hultman-10 MERS
Procedures Manual 6 4 Hultman-11 MERS Rules of Membership 6 5 Hultman-12 Letter dated 1/8/99 6
6 Hultman-13 Delaware Secretary of State
7 Certification 6 8 Hultman-14 Certificate of Incorporation
9 effective 1/1/99 6 10 Hultman-15 MERS Rules of Membership 6 11 Hultman-16 MERS Procedure Manual
7 12 Hultman-17 MERS Bylaws dated 10/17/95 7 13 Hultman-18 MERS Bylaws dated 1/1/95 7 14 Hultman-
19 Letter dated 2/18/10 7 15 Hultman-20 Subpoena dated 2/16/10 7 16 Hultman-21 Letter dated 3/17/10 7 17
Hultman-22 PHS 10-11, Referral Account
18 Detail Report 7 19 Hultman-23 PHS 475-476, E-mail exchange 7 20 Hultman-24 Assignment dated 3/14/08 7 21
Hultman-25 Complaint with FDCPA Notice
22 dated 3/13/08 7 23 Hultman-26 MERS Policy Bulletin dated
24 2/17/10 7 25 Hultman-27 MIN Milestones 7
DEGNAN & BATEMAN
(856) 232-7400
Page 5
1 Hultman-28 MERS Corporate Resolution
2 Application Form 7 3 Hultman-29 Stipulation 7 4 Hultman-30 Agenda dated 4/9/98 37 5 Hultman-31 MERS
Minutes dated 4/9/98 54 6 Hultman-32 MERS Corporate Resolution 55 7
8
9 R E Q U E S T S
10
11 Line Page
12 18 9
13 5 21
14 16 29
15 15 40
16 21 45
17 9 56
18 4 57
19 13 83
20 23 100
21 21 106
22 15 140
23
24
25
DEGNAN & BATEMAN
(856) 232-7400
Page 6
1 (Hultman-1, MIN Summary, was marked for 2 identification; Hultman-2, MIN Milestones, 3 was marked for
identification; Hultman-3, 4 Signing Authority Agreement, was marked for 5 identification; Hultman-4,
Corporate
6 Resolution, was marked for identification; 7 Hultman-5, Bank of New York (Western Trust) 8 Membership
application, was marked for 9 identification; Hultman-6, Countrywide Home
10 Loans Membership application, was marked for 11 identification; Hultman-7, Letter dated 12 11/1/09, was
marked for identification; 13 Hultman-8, Letter dated 4/30/00 was marked 14 for identification; Hultman-9,
MERS Terms and 15 Conditions, was marked for identification; 16 Hultman-10, MERS Procedures Manual,
was 17 marked for identification; Hultman-11, MERS 18 Rules of Membership, was marked for
19 identification; Hultman-12, Letter dated 20 1/8/99, was marked for identification; 21 Hultman-13,
Delaware Secretary of State 22 Certification, was marked for identification; 23 Hultman-14, Certificate of
Incorporation 24 effective 1/1/99, was marked for
25 identification; Hultman-15, MERS Rules ofDEGNAN & BATEMAN
(856) 232-7400
Page 7
1 Membership, was marked for identification; 2 Hultman-16, MERS Procedure Manual, was marked 3 for
identification; Hultman-17, MERS Bylaws 4 dated 10/17/95, was marked for
5 identification; Hultman-18, MERS Bylaws dated 6 1/1/95, was marked for identification; 7 Hultman-19,
Letter dated 2/18/10, was marked 8 for identification; Hultman-20, Subpoena 9 dated 2/16/10, was marked for
identification;
10 Hultman-21, Letter dated 3/17/10, was marked 11 for identification; Hultman-22, PHS 10-11, 12 Referral
Account Detail Report, was marked 13 for identification; Hultman-23, PHS 475-476, 14 E-mail exchange, was
marked for 5 identification; Hultman-24, Assignment dated 16 3/14/08, was marked for identification; 17 Hultman-25,
Complaint with FDCPA Notice dated 18 3/13/08, was marked for identification; 19 Hultman-26, MERS Policy
Bulletin dated 20 2/17/10, was marked for identification; 21 Hultman-27, MIN Milestones, was marked for 22
identification; Hultman-28, MERS Corporate 23 Resolution Application Form, was marked for 24 identification;
Hultman-29, Stipulation, was 25 marked for identification.)
DEGNAN & BATEMAN
(856) 232-7400
Page 8
1 (The following is a conference with 2 Judge Todd:)
3 THE COURT: Now, this is Judge Todd, 4 I'm sitting in my courtroom, the attorneys are
5 participating by telephone. I understand there's a 6 court reporter there. Some of the attorneys are -- 7 let me
ask the attorneys who are participating to 8 enter their appearances and to note preliminarily the 9 caption and
the docket number of the case.
10 MR. MALONE: Okay. I will start, Your 11 Honor. This is Mark Malone for the Ukpe defendants. 12 The
caption of the case is Bank of New York as Trustee 13 for the Certificate Holders CWABS, Inc. Asset-Backed 14
Certificate Series 2005-AB3 versus Victor and Enoabasi 15 Ukpe, docket number F-10209-08. And appearing
with me 16 this morning are Abigail Sullivan of South Jersey 17 Legal Services and James Villere.
18 MR. ORR: Your Honor, this is Daniel 19 Orr with Morgan, Lewis, Bockius representing nonparty 20 MERS.
They're the witness who is appearing today. 21 With me is Robert Brochin who is in our DC office with 22 the
witness.
23 THE COURT: Anybody else?
24 MR. BERNHEIM: This is Dan Bernheim 25 from Wilentz Goldman representing the firm Phelan,
DEGNAN & BATEMAN
(856) 232-7400
Page 9
1 Hallinan and Schmieg. I am participating by telephone 2 conference.
3 MS. ROSE-SMITH: Your Honor, this is 4 Sabrina Rose-Smith, I'm here on behalf of Bank of New 5 York and
third parties Countrywide Home Loans
6 Servicing and Countrywide Home Loans, Inc., and I am 7 in Washington DC with the witness.
8 MR. BERNHEIM: In addition, Your Honor, 9 Judy Romano who is in-house counsel for the law firm 10 is also
participating by telephone conference. 11 MR. MURPHY: John Murphy, I'm also in 12 Washington DC and I'm
in-house counsel for MERS. 13 THE COURT: Is that everyone?
14 MR. MALONE: Mr. Brochin.
15 MR. ORR: I entered an appearance for 16 Mr. Brochin.
17 THE COURT: Now, whose pro hac vice 18 admission is being sought? For what litigant party? 19 MR. ORR:
Your Honor, we've sought 20 Mr. Brochin's pro hac vice admission on an expedited 21 basis so defendants who
served a subpoena on MERS, and 22 they requested that we seek Mr. Brochin's pro hac vice 23 admission since
he would be appearing remotely from 24 Washington DC with the witness. There has been no 25 objection to the
application. Under normal 1 circumstances, Your Honor, I would defend the 2 deposition, however, I am recovering from spine 3 surgery and I cannot sit for an extended period of 4 time.
DEGNAN & BATEMAN
(856) 232-7400
Page 10
5 THE COURT: Who is that that was just 6 speaking?
7 MR. ORR: This is Daniel Orr, Your 8 Honor.
9 THE COURT: So Mr. Brochin's going to 10 be admitted pro hac to represent the person, to 11 represent
MERS in conjunction with the deposition that 12 is being conducted this morning?
13 MR. ORR: Yes, Your Honor. We're 14 actually not -- since MERS is not actually a party, 15 and the witness or
the deposition is being conducted 16 out of state, we're not actually sure whether or not a 17 pro hac admission is
required under the rules. 18 However, defendants have suggested that it is, and 19 since there was no opposition
to the application, you 20 know, we thought it would be prudent to ask the 21 Court's permission.
22 THE COURT: And does the application 23 that's pending recite consistent with the pro hac vice 24 rule, either
a long-standing relationship with the 25 client or expertise in the area of the law or 1 something like that?
DEGNAN & BATEMAN
(856) 232-7400
Page 11
2 MR. ORR: Yes, Your Honor, Mr. Brochin 3 has a long-standing attorney/client relationship with 4 MERS.
He has represented MERS in over 70 proceedings. 5 THE COURT: And the witness is actually 6 appearing in
what jurisdiction?
7 MR. ORR: The witness is appearing 8 remotely by video teleconference from Washington DC, 9 Your Honor.
10 THE COURT: That's where Mr. Brochin is 11 also?
12 MR. ORR: Yes.
13 (Conference with Judge Todd ends.) 14 WILLIAM HULTMAN,
15 having been duly sworn, was examined 16 and testified as follows:
17 BY MR. MALONE:
18 Q. Mr. Hultman, my name is Mark Malone. 19 With me are co-counsel, we represent the Ukpe 20 defendants,
Abigail Sullivan of South Jersey Legal 21 Services and James Villere. Good morning.
22 A. Good morning.
23 Q. I understand you have been deposed 24 previously, is that correct?
25 A. Yes.
DEGNAN & BATEMAN
(856) 232-7400
Page 12
1 Q. Approximately in the last three years, 2 how many times have you been deposed?
3 A. Four times.
4 Q. Do you remember the names of those 5 cases?
6 A. I do not.
7 Q. Okay. Briefly, would you describe for 8 us your legal education?
9 A. I went to the State University of New 10 York Law School at Buffalo from 1977 -- or graduated 11 in 1977.
12 Q. Are you a member of any bar currently? 13 A. I'm a member of the New York Bar. 14 Q. And would you
describe for us your 15 employment history after graduating from law school? 16 A. I worked for a firm LaTona
and 17 Associates, which was a general practice firm in 18 Buffalo, New York for two years. I worked as a staff
19 attorney for the Forest Oil Corporation at Bradford, 20 Pennsylvania for two years. I worked for the law firm
21 of Moot and Sprague for a period of five years, first 22 as an associate and then as a partner. I was then an 23
Administrative Vice President of Empire of America 24 Federal Savings Bank and later I became the treasurer
25 of that institution. I then worked for the FDIC as a
DEGNAN & BATEMAN
(856) 232-7400
Page 13
1 managing agent for the Resolution Trust Corporation 2 for about a period of 17 months. I worked for three 3
Midlantic Banks as a vice president for a period of 4 about two and a half years. I then worked for Barnett 5
Bank in Jacksonville, Florida for a period of four 6 years after that, and I worked at MERS for the last 7 14
years -- or 12 years, excuse me.
8 Q. When did you first start working at 9 MERS?
10 A. February of 1998.
11 Q. And when I say MERS, I'm going to use 12 that as an abbreviation for Mortgage Electronic 13 Registration
Systems, Inc., is that understood? 14 A. Yes.
15 Q. And is that an appropriate shorthand 16 for describing your employer?
17 A. My employer is not MERS. If you're 18 using Mortgage Electronic Registration System, Inc. -- 19 Q.
Who is your employer?
20 A. Merscorp, Inc.
21 Q. Do you have any kind of relationship 22 with Mortgage Electronic Registration Systems, Inc.? 23 A. Yes.
24 Q. What is that relationship?
25 A. I'm the secretary and treasurer.DEGNAN & BATEMAN
(856) 232-7400
Page 14
1 Q. And do you have any kind of
2 relationship with MERS? What is your relationship 3 with Merscorp, Inc.?
4 A. I'm senior vice president and corporate 5 division manager, and I also have -- I'm also the 6 secretary and
treasurer of that corporation.
7 Q. Todays subpoena is directed towards 8 Mortgage Electronic Registration Systems, Inc. You 9 understand
that?
10 A. I do.
11 Q. And do you understand that the answers 12 you're giving will bind Mortgage Electronic
13 Registration Systems, Inc.?
14 A. I do.
15 MR. BROCHIN: Object to the form of the 16 question.
17 BY MR. MALONE:
18 Q. And further, do you understand you're 19 testifying under oath today?
20 A. Yes.
21 Q. And that your answers will be used or 22 may be used as evidence in a court proceeding in New 23 Jersey.
Do you understand that?
24 MR. BROCHIN: Objection.
25 THE WITNESS: If that's a question,DEGNAN & BATEMAN
(856) 232-7400
Page 15
1 yes.
2 BY MR. MALONE:
3 Q. That was a question. And if at any 4 time you don't understand my question, please just 5 tell me and I'll
try and rephrase it. I'd like to 6 start by going through the documents that have been 7 premarked that were sent to us by your counsel in 8 response to a subpoena and -- in response to a 9 subpoena. The first set of documents we received, we
10 have marked as Hultman Exhibit 1, and they are MERS -- 11 they have been Bates stamped MERS 1 --
Hultman Exhibit 12 1 has been marked as MERS 1. Do you have that 13 available?
14 MR. BROCHIN: Okay. Again, we're not 15 going to have it with the Hultman-1. What we have is 16 Bates
stamp document MERS/Ukpe 1, it's a letter dated 17 February 18th and it's Bates stamped 1 through 6. 18 MR.
MALONE: That's not the one, Bobby. 19 I'm talking about MERS, MERS 1, not MERS/Ukpe. 20 There's two
distinct sets of documents that was 21 explained -- as was explained in both sets of letters 22 that were sent to
you yesterday.
23 MR. BROCHIN: Yeah, good, but all I'm 24 looking at are the documents that apparently 25 Ms. Sullivan
provided to Dan Orr that were scanned in 1 and sent to us. That's what I'm looking at.
DEGNAN & BATEMAN
(856) 232-7400
Page 16
2 MR. MALONE: Okay. And he --
3 Ms. Sullivan gave Dan a set of documents marked MERS 1 4 through MERS 432. If you could locate that set
of 5 documents, I'd like to just identify those, the 6 documents that were provided by MERS.
7 MR. BROCHIN: I got the letters, I 8 don't have those. I say we go off the record for a 9 second.
10 (Discussion off the record.)
11 MR. MALONE: Maybe we can start at 12 least in terms of the identification of exhibits. I 13 can tell you what
the court reporter has marked and 14 you can note on your copies the court reporter 15 exhibit.
16 MR. BROCHIN: What I'm going to do is 17 when you refer to an exhibit as Hultman X, I'm going 18 to write
that down on this exhibit itself and keep a 19 copy.
20 MR. MALONE: Correct. And if you could 21 get someone to print out from your office the letter 22 that was
sent to you.
23 MR. BROCHIN: I have the letter. 24 MR. MALONE: Okay. That has the 25 identical information. So you can
just double check 1 it against that.
DEGNAN & BATEMAN
(856) 232-7400
Page 17
2 MR. BROCHIN: Yeah, I got that. 3 MR. MALONE: Okay.
4 BY MR. MALONE:
5 Q. Starting with the MERS/Ukpe exhibits 6 which are exhibits that we have marked for the 7 deposition,
MERS/Ukpe 1, a single page has been marked 8 as Hultman-19. And for the record, it's a
9 February 18th letter from Abigail Sullivan to Sharon 10 M. Horstkamp, Vice President and General Counsel 11 Merscorp.
12 MR. BROCHIN: So the witness now has 13 that document in front of him.
14 BY MR. MALONE:
15 Q. All right. Mr. Hultman, you have 16 MERS -- I'm sorry, you have Hultman Exhibit 19 in 17 front of you.
Have you seen that letter before today? 18 A. No.
19 Q. Okay. Moving on to Hultman Exhibit 20, 20 Bates stamp MERS/Ukpe 002 through 006.
21 A. I have it.
22 MR. BROCHIN: Marking that as Hultman 23 exhibit number?
24 MR. MALONE: 20. 20.
25 THE WITNESS: Got it.
DEGNAN & BATEMAN
(856) 232-7400
Page 18
1 BY MR. MALONE:
2 Q. Okay. Have you seen Hultman Exhibit 20 3 prior to today?
4 A. Yes, I have.
5 Q. And would you tell us what you did in 6 response to efforts to comply with Hultman Exhibit 20, 7 a
subpoena? What you did to comply.
8 A. I directed members of my -- the people 9 that work for me in the law department to produce the 10
relevant documents.
11 Q. Okay. Mr. Hultman, regarding your 12 attention to paragraph one of the subpoena in Hultman 13 Exhibit 20, can you tell us what documents, if any, 14 were located in response to the request in paragraph 15 one which is found on Bates stamped MERS/Ukpe 003? 16 A. On paragraph one you mean?
17 Q. Yes.
18 A. We found a copy of the -- of what we 19 would call a signing agreement between MERS -- and I'm 20 using
MERS to mean Mortgage Electronic Registration 21 Systems, Inc., the law firm of Phelan, Hallinan and 22
Schmieg and Countrywide Home Loans, LLP. We have not 23 found an executed copy of the other, the other
24 agreement referenced in that paragraph. We did 25 have -- we do have an unsigned copy of it, but not a
DEGNAN & BATEMAN
(856) 232-7400
Page 19
1 signed copy.
2 Q. And I'm sorry, what document do you 3 have an unsigned copy of referenced in paragraph one? 4 A. The
Signing Authority Agreement between 5 MERS, Phelan, Hallinan and Schmieg and Countrywide 6 Home
Loans, PC.
7 Q. Okay.
8 A. The PC firm.
9 Q. And for the record, paragraph one does 10 not mention a signing agreement. But you have, you 11 have
found and located a signing agreement in response 12 to your search for paragraph one documents?
13 A. That's the only agreement that we have. 14 There's a -- we have an unsigned work copy of the 15 agreement
and we have a signed -- an image of the 16 signed copy between MERS, Phelan Hallinan and Schmieg, 17 and
Countrywide Home Loans.
18 MR. MALONE: We have not received a 19 copy of that unsigned work copy. We request a copy of 20 that,
Mr. Brochin, and we can send a follow-up letter 21 to that effect.
22 MR. BROCHIN: We'll send you a copy. 23 BY MR. MALONE:
24 Q. All right. Paragraph one also asks for 25 the application of the law firm to have the attorneys
DEGNAN & BATEMAN
(856) 232-7400
Page 20
1 get appointed. Have you located any application by 2 the law firm for its attorneys to be appointed as MERS 3
officers?
4 A. No.
5 Q. Generally, in your experience, do MERS 6 officers who are what MERS would call certifying 7 officers
make application to get appointed as 8 officers?
9 A. There is a -- for MERS members, there 10 is a form that is filled out by the member, which 11 triggers the
production of a Corporate Resolution. 12 Q. And are the -- is the law firm Phelan, 13 Hallinan and Schmieg a
MERS member?
14 A. No.
15 Q. And can you tell us what the
16 application process was that was followed for a 17 nonMERS member Phelan, Hallinan and Schmieg? 18 A.
There isn't an application process. 19 Q. Then can you describe for us what 20 process was followed resulting in
members of Phelan, 21 Hallinan and Schmieg entering into a signing agreement 22 with MERS by which certain attorneys in the Phelan, 23 Hallinan and Schmieg firm were made officers of MERS? 24 A. Countrywide, representatives of 25 Countrywide requested by e-mail that we enter into a
DEGNAN & BATEMAN
(856) 232-7400
Page 21
1 signing agreement between Countrywide, MERS, and that 2 law firm. They supplied us with a list of the
persons 3 who would be appointed MERS officers in that
4 correspondence.
5 MR. MALONE: We have not received a 6 copy of that e-mail. We request that we be provided 7 with that,
that piece of communication.
8 BY MR. MALONE:
9 Q. To your knowledge, is that e-mail the 10 first documentation leading up to -- chronologically 11 the first
documentation leading up to the appointment 12 of Francis Hallinan as a MERS assistant secretary and 13
vice president?
14 A. I believe so, yes.
15 Q. Were there any conversations, to your 16 knowledge, preceding the e-mail being sent?
17 A. I don't know.
18 Q. Were you involved in the process of a 19 nonMERS member, Mr. Francis Hallinan, becoming 20 appointed
as a MERS officer, that is an assistant 21 secretary and vice president?
22 A. Yes.
23 Q. In what way were you involved in the 24 process?
25 A. I executed the signing agreement andDEGNAN & BATEMAN
(856) 232-7400
Page 22
1 executed the resolution.
2 Q. Do you know, do you know when the 3 e-mail was dated requesting from Countrywide that 4 Mr. Hallinan
and other members of his firm be made 5 MERS officers?
6 A. I don't have that date in my head. 7 Q. Approximately, how much was it before 8 you executed the signing
agreement? Agreement For 9 Signing Authority?
10 A. I don't know.
11 Q. Was the case of the Phelan firm 12 attorneys becoming MERS officers when they were not 13 MERS
members the first time, to your knowledge, that, 14 that had happened, that is employees of nonMERS 15
members were made officers of MERS?
16 A. I'm not sure I understand your 17 question.
18 Q. Okay. Let's drop back then. At one 19 point in time, did MERS have a policy that only MERS 20 members
could nominate their employees to be MERS 21 officers?
22 A. Yes.
23 Q. When did that policy change?
24 A. I don't have an exact recollection of 25 the time frame, but it was early in the process in the
DEGNAN & BATEMAN
(856) 232-7400
Page 23
1 first couple years.
2 Q. And could you tell us what you mean by 3 early in the process in the first couple of years? 4 A. Sometime
before 2000.
5 Q. Can you tell us how the change came 6 about?
7 A. Members requested that we consider it 8 and we decided to do it.
9 Q. Was there, these requests for members, 10 was there some kind of correspondence from the members 11 requesting it?
12 A. I don't recall.
13 Q. To your knowledge, is there any 14 documentary record of the members requesting this 15 change in the
early years, sometime prior to 2000? 16 A. I did not make an examination and I do 17 not recall.
18 Q. Who evaluated the request by the 19 members that nonMERS members be able to have their 20 employees
nominated and appointed as officers of the 21 corporation?
22 A. The officers of the corporation. 23 Q. And who are they at the time?
24 A. I believe at the time, the president 25 was R.K. Arnold, the vice president was Daniel
DEGNAN & BATEMAN
(856) 232-7400
Page 24
1 McLaughlin, another vice president Carson Mullen, and 2 myself as secretary and treasurer.
3 Q. What was the process that the four of 4 you undertook leading up to a decision to change MERS' 5 policy
so that employees of nonmembers of MERS could 6 become corporate officers?
7 A. I don't have any recollection of those 8 conversations right now.
9 Q. Since you received the subpoena, have 10 you talked to any other person about those early days 11 how
this change came about?
12 A. I did not.
13 Q. The matter of changing MERS' policy so 14 that nonMERS member's employees could become officers 15
of the corporation, was that matter presented to the 16 MERS Board of Directors?
17 A. I don't recall.
18 Q. Do you have any knowledge of any 19 resolution by the MERS Board of Directors authorizing 20 a change
in MERS policy such that employees of nonMERS 21 members could become officers of the corporation? 22 A.
There was a resolution that authorized 23 me to appoint officers of MERS that was passed by the 24 board of directors of that company.
25 Q. What company was that, that passed thatDEGNAN & BATEMAN
(856) 232-7400
Page 25
1 resolution?
2 A. MERS.
3 Q. When was that resolution passed? 4 A. April of 1998.
5 Q. We have not received a copy of that 6 resolution and we'd like to receive it for today's 7 deposition.
8 MR. BROCHIN: I believe that's one of 9 the documents that were sent to you last night. 10 MR. MALONE: I
do not believe so. We 11 went through the documents last night. The documents 12 you sent us last night.
13 MR. BROCHIN: John is indicating he 14 sent it to Ms. Sullivan last night and he's going 15 to --
16 MR. MURPHY: At 6:26 p.m.
17 MR. MALONE: What is the identity of 18 the document, John? How is it captioned?
19 MR. MURPHY: MERS board meeting 20 minutes.
21 MR. MALONE: No, we have not received 22 any such document. You may have sent it, but we 23 haven't
-- we haven't --
24 MS. SULLIVAN: It's going to be tricky 25 but I can try.
DEGNAN & BATEMAN
(856) 232-7400
Page 26
1 MR. MALONE: Okay. Does Dan have a 2 copy on this end? It may have been received last 3 night, but none
of us have it.
4 MR. BROCHIN: I believe John sent it 5 directly to Ms. Sullivan.
6 MR. MALONE: Ms. Sullivan unfortunately 7 left her office at 5 o'clock, 6 o'clock, and so if it 8 was sent
directly to her, the communication is still 9 sitting in her office. So let me --
10 MR. BROCHIN: It was sent by e-mail. I 11 don't know if you have the ability to pick them up 12 outside of
your office, but it was sent by e-mail. 13 MR. MALONE: Let me ask first because 14 that indicates to me we don't have a complete set of 15 the MERS production. The last documents we received 16 from Mr. Murphy were the MERS bylaws. That's the last 17 document. I'm sorry, yeah, MERS bylaws. Yeah, MERS 18 bylaws dated January 1, 1995. MERS 421 through MERS 19 432 is what we marked them. Correct? So Mr. Murphy, 20 if we could, Bobby, just to clarify the record, after 21 you sent the MERS bylaws dated January 1st, 1995 last 22 night you sent some additional documents?
23 MR. MURPHY: I sent the 1999 bylaws via 24 e-mail to Ms. Sullivan at 3:45 p.m.
25 MS. SULLIVAN: We have that.
DEGNAN & BATEMAN
(856) 232-7400
Page 27
1 MR. MALONE: This is mismarked, I 2 think.
3 MR. VILLERE: I think it is, too. 4 MR. MALONE: And you also sent -- just 5 one moment, please. The last
document we had received 6 and actually been able to access or did access was 7 around 4:30 in the afternoon
and it is the MERS bylaws 8 dated January 1, 1999. So John, can you tell us what 9 has been sent since then?
10 MR. MURPHY: The only other document 11 that was sent was the MERS board meeting minutes and I 12
sent that at 6:26 p.m. to Ms. Sullivan.
13 MR. MALONE: And the date of those 14 minutes? I'm sorry?
15 MR. MURPHY: I'm looking it up. 16 April 9, 1998.
17 MR. BROCHIN: But you sent the 18 certified resolution as well?
19 MR. MURPHY: Yes.
20 MR. BROCHIN: That was attached to the 21 minutes?
22 MR. MALONE: How many pages was the 23 document, John, if you know?
24 MR. MURPHY: Six.
25 MR. MALONE: Okay. Was a copy sent toDEGNAN & BATEMAN
(856) 232-7400
Page 28
1 Mr. Orr?
2 MR. MURPHY: No.
3 MR. BROCHIN: No.
4 MR. MALONE: Can a copy be sent to 5 Mr. Orr now?
6 MR. BROCHIN: We can resend it to you 7 right now.
8 MR. MALONE: We don't have the ability 9 to print it out, that's the problem. We're in your 10 office in
Princeton.
11 MR. BROCHIN: Okay. Yes, we can send 12 one to Mr. Orr.
13 MR. MALONE: Could one be sent to 14 Mr. Orr with the request that he run it off and bring 15 it down to us,
or someone bring it down to us? 16 MR. BROCHIN: Yes.
17 (Discussion off the record.)
18 MR. MALONE: While we're waiting for 19 that document, I do have some questions that I can 20 continue
with.
21 MR. BROCHIN: Yes, please, I think that 22 would be helpful.
23 BY MR. MALONE:
24 Q. Okay. The meeting of the board of 25 April 9, 1998, Mr. Hultman, did you attend that 1 meeting?
DEGNAN & BATEMAN
(856) 232-7400
Page 29
2 A. I did.
3 Q. And what was the board that met? What 4 was the name of the corporation?
5 A. It was Mortgage Electronic Registration 6 Systems, Inc.
7 Q. We've been provided some incorporation 8 documents reflecting that Mortgage Electronic 9 Registration
Systems, Inc. was incorporated, we have 10 Delaware Secretary of State Certificate of 11 Incorporation dated December 30, 1998, effective 12 January 1, 1999. So are there earlier Articles of 13 Incorporation than the ones that have been provided to 14 us?
15 A. Yes.
16 MR. MALONE: We would ask that those 17 earlier articles be provided also then since -- 18 BY MR.
MALONE:
19 Q. What is the relationship between the 20 earlier company that had a meeting of the board on 21 April 9,
1998 and the company that was incorporated in 22 Delaware on December 30, 1998, with an effective date 23
of incorporation of January 1, 1999?
24 A. The corporation that was incorporated 25 at 1999 is a wholly owned subsidiary of Merscorp, Inc.
DEGNAN & BATEMAN
(856) 232-7400
Page 30
1 Prior to 1999, the name of that corporation was 2 Mortgage Electronic Registration Systems, Inc. and 3
prior to that, there was a predecessor corporation 4 which was a membership corporation which also had the 5
name Mortgage Electronic Registration Systems, Inc. 6 Q. And can you tell us if anything the 7 predecessor
board did on April 9, 1998, was binding on 8 the new corporation incorporated on -- incorporated 9 effective
January 1, 1999?
10 MR. BROCHIN: Object to the form of the 11 question.
12 THE WITNESS: Basically, the subsidiary 13 assumed all of the authority relating to holding title 14 to the
mortgage that the original corporation had. 15 BY MR. MALONE:
16 Q. Other than assuming --
17 MR. MALONE: I'm sorry, I'll have the 18 court reporter -- I'll ask the court reporter to read 19 that answer
back.
20 (The stenographer read back the 21 last answer.)
22 BY MR. MALONE:
23 Q. Other than assuming something to do 24 with the mortgage the original corporation had, did 25 anything
the prior corporation did bind the new
DEGNAN & BATEMAN
(856) 232-7400
Page 31
1 corporation when it came into existence effective 2 January 1, 1999?
3 A. Most of the -- again, the authority 4 that related to holding title to the mortgage was 5 adopted by the new
corporation.
6 Q. And I'm sorry, maybe you can explain 7 that a little bit. I'm not sure what's meant by the 8 authority relating
to the holding of a mortgage. 9 A. The subsidiary is a single purpose 1corporation that was incorporated for the sole purpose 11 of holding title to the mortgage. The other 12 operations of the old corporation remained with the 13 parent corporation, the operation of the registry
and 14 the other operational issues associated with the MERS 15 process.
16 Q. And when you say holding title to the 17 mortgage, can you explain what you mean by that 18 phrase?
19 A. One of the things that the primary duty 20 of the subsidiary is to act as mortgagee when 21 requested by the borrower and our members.
22 Q. If I follow your answer, and forgive 23 me, I'm not a corporate lawyer, so I'm having some 24 difficulty. The subsidiary, I understand it,
took 25 over, its sole purpose became holding title to
DEGNAN & BATEMAN
(856) 232-7400
Page 32
2 A. Yes.
3 Q. Did it have any other responsibilities? 4 A. No.
5 Q. Can you explain to us why that change 6 was made?
7 A. Yes.
8 Q. Please do.
9 A. As a requirement for mortgages that 10 were securing loans or promissory notes that were sold 11 to
securitize trust, the rating agencies would only 12 allow mortgages MERS -- well let me step back. They
13 required that a bankruptcy remote single purpose 14 entity be created in order for transactions holding
15 loans secured by MERS, by mortgages MERS served as 16 mortgagee to be in those pools and receive
a rating, 17 an investment grade rating without any changes to the 18 credit enhancement. They required
that to be a 19 bankruptcy remote single purpose subsidiary of MERS, 20 of Merscorp.
21 Q. And is MERS, Inc. the entity that came 22 into existence on January 1, 1999, a bankruptcy remote
23 vehicle?
24 A. Merscorp, Inc., which is the parent 25 corporation, is a Delaware stock corporation of
DEGNAN & BATEMAN
(856) 232-7400
Page 33
1 Mortgage Electronic, which is the sole shareholder in 2 Mortgage Electronic Registration Systems, Inc., the
3 bankruptcy remote subsidiary.
4 Q. And my question simply is, is MERS, 5 your MERS, Mortgage Electronic Registration Systems, 6 Inc., is
it a bankruptcy remote vehicle?
7 MR. BROCHIN: Object to the form of the 8 question.
9 THE WITNESS: It falls within what's 10 generally considered to be that.
11 BY MR. MALONE:
12 Q. And for the record, could you briefly 13 explain to us, based on your knowledge, what is meant 14 by the
phrase bankruptcy remote?
15 A. There are requirements that required, 16 under rating agency criteria, that set out the things 17 that are
required in order to be considered that type 18 of entity, which are spelled out in the charter and 19 among them is
the requirement that there be an 20 independent director and that, that independent 21 director in that subsidiary,
if it ever was in a 22 position that it needed to file for protection of the 23 bankruptcy laws, that independent
director would have 24 to vote in favor of that before that could happen. 25 Q. So if I follow you correctly,
Mortgage 1 Electronic Registration, Inc., the company that came 2 into existence on January 1, 1999, is a separate
and 3 distinct legal entity than the prior company, is that 4 correct?
5 A. That's correct. That's correct. 6 Q. Is the new company -- was the new 7 company in any way bound by any
acts of the prior 8 company?
9 A. To the extent that we --
DEGNAN & BATEMAN
(856) 232-7400
Page 34
10 Q. The court reporter couldn't hear your 11 answer.
12 A. The subsidiary corporation assumed some 13 of the obligations of the parent corporation. 14 Q. Which
obligations were assumed by the 15 new subsidiary corporation?
16 A. The ones that related to holding title 17 to mortgages or acts as mortgagee or beneficiary under 18 a deed of
trust.
19 Q. Other than what you just described, was 20 the new corporation in any way bound by any other 21 prior
activity of the earlier corporation?
22 MR. BROCHIN: Object to the form of the 23 question.
24 THE WITNESS: No.
25 BY MR. MALONE:
DEGNAN & BATEMAN
(856) 232-7400
Page 35
1 Q. Specifically, was the new corporation 2 in any way bound by resolutions passed by the old 3 corporation?
4 MR. BROCHIN: Object to the form of the 5 question.
6 THE WITNESS: Only to the extent that 7 they assumed those resolutions.
8 BY MR. MALONE:
9 Q. Can you tell us which resolutions the 10 new company, the company that came into existence on 11
January 1, 1999 assumed?
12 A. There's a whole series of them. I 13 don't have them in front of me and I didn't look at 14 them in
preparation for this deposition.
15 Q. Okay. One was produced today and 16 actually, we don't have a resolution. Do you know if 17 any
resolution from the old board was adopted by the 18 new board as binding that has any relevance to the 19
appointment of nonmember employees as corporate 20 officers?
21 A. I did not look at the records. I would 22 have to go back and look at the records.
23 Q. Okay. What would it take you to do 24 that, to go back -- I take it you have to go back to 25 your office?
DEGNAN & BATEMAN
(856) 232-7400
Page 36
1 A. Yes.
2 Q. Okay. We're going to ask that, that be 3 done and that the end of today, we'll move to adjourn 4 the
deposition but not complete it and we can pick up 5 by way of telephone conference at your convenience.
6 But this fundamental question whether anything the old 7 board did has any relevance to what we're talking
8 about today remains open. I'm going to ask that -- 9 MR. MALONE: Mr. Orr has delivered to 10 us a
document captioned Mortgage Electronic
11 Registration Systems, Inc., Board of Directors, 12 Regular Meeting, MERS Corporate Headquarters, has
an 13 address and it has a date of April 9, 1998, and it 14 says Agenda at the top. And at the back of the
15 document, there is a certificate saying -- well, I'll 16 get to it once the exhibit is marked. Why don't we
17 have this --
18 MR. BROCHIN: Okay. Well, you're going 19 to need to send that to me because we don't have a 20
copy of that. The reporter is marking it as an 21 exhibit, so.
22 MR. MALONE: We haven't marked it yet. 23 MR. BROCHIN: I'm going to have to get 24 a copy of that
and I'm going to have to get it printed 25 and marked as an exhibit here. So maybe you can move
DEGNAN & BATEMAN
(856) 232-7400
Page 37
1 on to some other area and return to this at a later 2 time.
3 MR. MALONE: Okay. Well, let me 4 just -- I'm agreeable to that. I have one question 5 though about what
was sent to us, but let me mark it. 6 For the record, we haven't gotten it yet, but the 7 stipulation that Mr. Orr
signed on this end and 8 Ms. Sullivan signed we have had premarked by the 9 reporter as Hultman Exhibit 29.
I don't believe you
10 have that because it was just marked this morning. 11 And we can make available a copy to you during the
12 recess. So I'm going to ask the court reporter to 13 mark this document that Mr. Murphy had sent last
14 evening and Mr. Orr delivered to us this morning the 15 agenda document, I'll ask to be marked Hultman-30.
16 (Hultman-30, Agenda dated 4/9/98, was 17 marked for identification.)
18 MR. MALONE: Bobby, have you gotten a 19 copy of the agenda item?
20 MR. BROCHIN: No, I haven't.
21 MR. MALONE: Okay. I do want to come 22 back to it, but I said I had one question and that has 23 to do
with the, the Corporate Resolution that's at the 24 back of the exhibit, and it has Mr. Hultman's 25 signature,
but it's dated December 20, 2002.
DEGNAN & BATEMAN
(856) 232-7400
Page 38
1 BY MR. MALONE:
2 Q. Mr. Hultman, can you explain to us how 3 a resolution of April 9, 1998 doesn't get your 4 signature on
it until December 20, 2002?
5 A. That's a copy that we found in the file 6 where I had certified it as of that date for some 7 other purpose.
8 Q. And am I correct in understanding that 9 the copy that was found in the file was undated? 10 A. I don't
understand your question. 11 Q. You indicated that the document that we 12 have that you don't have a copy of yet,
but it's 13 Hultman-30, the last page has a certificate signed by 14 you and it's dated December 20, 2002. If I
understood 15 your explanation a moment ago, this is a copy of the 16 resolution found in the file that you dated
on 17 December 20, 2002 for some other matter.
18 A. Are you asking me the question? 19 Q. Did I understand you correctly? 20 MR. BROCHIN: Object to the
form of the 21 question.
22 THE WITNESS: I lost track of the 23 thread here because you keep moving back and forth. I 24 don't understand what you mean.
25 BY MR. MALONE:
DEGNAN & BATEMAN
(856) 232-7400
Page 39
1 Q. When you did something on December 20, 2 2002, can you tell us if you found a copy of the 3 resolution
in the file? A copy of this resolution? 4 A. I don't recall the circumstances under 5 which I executed that certificate.
6 Q. Was there, to your knowledge, a signed 7 copy of the certificate in the file when you went 8 looking back in
December of 2002?
9 A. I don't recall what happened in 2002. 10 Q. If I understood you correctly a moment 11 ago, you certified this
document on December 20, 2002 12 in relation to some other matter. There was a reason 13 you were being
asked to do it some four and a half 14 years after the board met. Do you recall what the 15 reason was?
16 A. No.
17 Q. On December 20, 2002, were you the 18 secretary of Mortgage Electronic Registration Systems, 19 Inc.?
20 A. Yes.
21 Q. Okay. And this resolution, is this a 22 resolution of Mortgage Electronic Registration 23 Systems, Inc., the
company that came into existence on 24 January 1, 1999, or is it a resolution of an earlier 25 company?
DEGNAN & BATEMAN
(856) 232-7400
Page 40
1 A. It's both.
2 Q. Were you the secretary of Mortgage 3 Electronic Registration, Inc. the company that existed 4 on April 9,
1998?
5 A. Yes.
6 Q. When did you first become secretary of 7 any entity known as Mortgage Electronic Registration 8 Systems,
Inc.?
9 A. I believe in April of 2000 -- 1998. 10 Q. Is there some board minute reflecting 11 that you have -- that you
were appointed as the 12 secretary, as an officer, a secretary of the 13 corporation?
14 A. Yes.
15 MR. MALONE: Okay. And we'd ask that, 16 that minute be provided and any corresponding 17 resolution
establishing that you were, in fact, the 18 secretary of an entity known as Mortgage Electronic 19 Registration
Systems, Inc. as of April 9, 1998. 20 BY MR. MALONE:
21 Q. When the board met on April 9, 1998 -- 22 well, I'll withdraw that. Before I go on to any 23 further questions, I think it important you both have 24 a copy of the document in front of you. You're still 25 waiting for it?
DEGNAN & BATEMAN
(856) 232-7400
Page 41
1 MR. BROCHIN: Still waiting for it. 2 MR. MALONE: All right. I will come 3 back to Hultman-30 then.
4 BY MR. MALONE:
5 Q. And I'm going to ask you to clarify 6 something for me because there's some confusion on my 7 part and my
colleague's part given the name -- given 8 the names of the companies and the fact that this new 9 company that
came into existence on January 1st, 1999
10 has the same name of an earlier company that had 11 different responsibilities. So maybe we can go back 12 to
the first company, the first Mortgage Electronic 13 Registration Systems, Inc. The one that passes -- the 14 one
that meets on April 9, 1998. When was that 15 company formed?
16 A. October 1995.
17 Q. And was that formed in accordance with 18 a set of bylaws?
19 A. Yes.
20 Q. And has that set of bylaws been made 21 available to us?
22 A. No.
23 MR. MALONE: Actually, is Mr. Murphy in 24 the room?
25 MR. MURPHY: Yes.
DEGNAN & BATEMAN
(856) 232-7400
Page 42
1 BY MR. MALONE:
2 Q. Mr. Murphy did provide a copy
3 yesterday, and once you have your complete set of 4 documents that you provided to us, we'll go through 5
them, they include a set of bylaws from 1995. But 6 until you see them, I won't ask you anymore questions 7
about them.
8 The resolution that was passed -- I'm 9 sorry, the meeting that took place on April 9, 1998, 10 was that in
accordance with the bylaws of 1995? 11 A. Yes.
12 Q. And do you recall what that -- what 13 those bylaws, those 1995 bylaws said about the 14 appointment
of corporate officers?
15 A. It says whatever it says. I don't have 16 it in front of us so I can't tell you what it says. 17 Q. Okay. Did
the company that was formed 18 in 1995, Mortgage Electronic Registration Systems, 19 Inc., go out of existence
at some point?
20 A. Yes.
21 Q. When did it go out of existence? 22 A. June 30, 1998.
23 Q. And was there a successor company that 24 took over its responsibilities?
25 A. Yes.
DEGNAN & BATEMAN
(856) 232-7400
Page 43
1 Q. And what was the successor company? 2 A. Mortgage Electronic Registration 3 Systems, Inc. that was
incorporated on June 30, 1998. 4 Q. And am I correct that this is, for 5 purposes of clarity, this is the second
entity created 6 with the name Mortgage Electronic Registration 7 Systems, Inc.?
8 A. Yes.
9 Q. And did that entity, the entity that 10 was formed on June 30, 1998, go out of existence at 11 some point?
12 A. No.
13 Q. Was a new entity with the same name, 14 Mortgage Electronic Registration Systems, Inc., 15 created
effective January 1, 1999?
16 A. Yes.
17 Q. And can you explain to me, a non corporate lawyer, how two companies with identical 19 names can exist at the same time?
20 A. It can't.
21 MR. BROCHIN: Object to the form of the 22 question.
23 BY MR. MALONE:
24 Q. I'm sorry?
25 A. They cannot.
DEGNAN & BATEMAN
(856) 232-7400
Page 44
1 Q. They cannot. So can you explain to me, 2 for purposes of clarity -- I'm going to ask you was 3 the company
that came into existence on January 1, 4 1999 the third company with the identical name 5 Mortgage Electronic
Registration Systems, Inc.? 6 A. Yes.
7 Q. You told us the first company went out 8 of existence at some point. What happened to the 9 second
company around the time the third company was 10 formed?
11 A. It changed its name and gave us consent 12 that the new corporation take that name.
13 Q. Okay. And when did this name change 14 take place?
15 A. January 1st, 1999.
16 Q. And what was the name change, please? 17 A. The name was changed to Merscorp, Inc. 18 Q. I'm sorry,
that was -- that's the name 19 of the third -- I'm sorry. Withdrawn. Withdrawn. So 20 there's an entity that comes
into existence on 21 January 1st, 1999 known as Merscorp, Inc.?
22 A. No.
23 Q. I'm sorry, straighten me out. I'm 24 confused.
25 A. Are you asking me a question?
DEGNAN & BATEMAN
(856) 232-7400
Page 45
1 MR. BROCHIN: Object to the form of the 2 question.
3 BY MR. MALONE:
4 Q. Tell us when Merscorp, Inc. came into 5 existence.
6 A. The corporate, the corporation with the 7 name Merscorp Inc. was incorporated on June 30, 1998. 8 Q.
But its name was not Merscorp, Inc. on 9 June 30, 1998, is that correct?
10 A. Yes.
11 Q. And what was its name on June 30, 1998? 12 A. Mortgage Electronic Registration 13 Systems, Inc.
14 Q. And precisely, when did it take on the 15 new name?
16 A. January 1st, 1999.
17 Q. Thank you. And were any new Articles 18 of Incorporation filed with that name change? 19 A. No.
A Certificate of Amendment was 20 filed.
21 MR. MALONE: Okay. We'd like to 22 receive a copy of the Certificate of Amendment. 23 BY MR. MALONE:
24 Q. Now, I'm trying to follow the path 25 taken by the entity that held a meeting on April 9,
DEGNAN & BATEMAN
(856) 232-7400
Page 46
1 1998. Is the entity that met on April 9, 1998 now 2 known as Merscorp, Inc.?
3 A. No.
4 Q. Is the entity that met on April 9, 1998 5 now known as Mortgage Electronic Registration Systems, 6 Inc.?
7 A. If you mean the corporation and 8 incorporated in 1999, no.
9 Q. What is the entity, if anything, that 10 met on April 9, 1998 known as?
11 A. It doesn't exist.
12 Q. And I think I'm getting a better 13 understanding. When did this entity that met on 14 April 9, 1998
cease existing?
15 A. June 30, 1998.
16 MR. MALONE: I'm sorry, I need to mute 17 a second. Go offline.
18 (Discussion off the record.)
19 BY MR. MALONE:
20 Q. Mr. Hultman, can you please explain to 21 us the entity MERS 2, the second iteration of a 22 company
with the name Mortgage Electronic Registration 23 Systems, Inc., did that succeed totally to the 24 business
interest of MERS 1?
25 A. Yes.
DEGNAN & BATEMAN
(856) 232-7400
Page 47
1 Q. And in succeeding to the business 2 interest, did it take on all of the -- were all of the 3 prior resolutions
and actions of a board from MERS 1 4 carried over and became the responsibility of MERS 2? 5 A. Yes.
6 Q. Now, when MERS 3 was created, you've 7 indicated there was division of responsibilities 8 between MERS
3 and the entity that became Merscorp, 9 Inc., is that correct?
10 A. There is no Merscorp, Inc. Oh, excuse 11 me, I'm sorry, yes. I'm sorry, I wasn't listening 12 carefully.
13 Q. Okay. Would you describe for us what 14 the responsibilities were in terms of the previous 15 organization,
MERS 2. What responsibilities does 16 Merscorp, Inc. take on when it started?
17 A. When Merscorp, Inc. started on June 30, 18 1998, it succeeded and assumed all of the duties and 19
responsibilities of powers of the original MERS 20 Corporation, Inc. in 1995. As of January 1st, 1999, 21
the functionalities of the original companies were 22 bifurcated into two parts. The subsidiary held was 23 given
the responsibility to hold title to the mortgage 24 lien or become the beneficiary of a deed of trust and 25 all the
responsibilities related to that. The parent
DEGNAN & BATEMAN
(856) 232-7400
Page 48
1 company, and the parent company obviously was the sole 2 shareholder of the subsidiary, the parent company
is 3 the operating company which all -- everybody's 4 employed by the operating company. It's the company 5
that owns the registries, owns all of the intellectual 6 property. It's the one that does all of the
7 operations. So in essence, everything that the old 8 companies did except for the title holding function. 9 Q.
And as for the title holding function,
10 that now resides with the third iteration of Mortgage 11 Electronic Registration Systems, Inc. as of January 1,
12 1999, is that correct?
13 A. Yes.
14 Q. And are there related responsibilities 15 to holding title?
16 A. Are there?
17 Q. Yes.
18 A. Is that the question?
19 Q. Yes, that's the question.
20 A. Well, there are, there are things that 21 come, that come from that.
22 Q. What things come from that?
23 A. Well, you know, that company is 24 responsible to release the lien when the loan is paid 25 off that it's
holding title to, or holding title to 1 the security interest.
DEGNAN & BATEMAN
(856) 232-7400
Page 49
If there are bankruptcy 2 proceedings, that company is authorized to conduct 3 certain of the actions of
bankruptcy, it can
4 foreclose. Generally, whatever functions that are 5 related to being a mortgagee and provided in the terms
6 of the mortgage instrument itself.
7 Q. The word certified, what does it mean 8 to you as first a lawyer?
9 MR. BROCHIN: Object to the form of the 10 question.
11 THE WITNESS: I don't understand your 12 question.
13 BY MR. MALONE:
14 Q. As an attorney, from time to time, have 15 you had to certify documents?
16 A. Yes.
17 Q. Okay. And when you certify those 18 documents, what does the word certify mean in that 19 context?
20 MR. BROCHIN: Object to the form of the 21 question.
22 THE WITNESS: I'm certifying that 23 they're a true and accurate representation of what 24 they're purported
to be.
25 BY MR. MALONE:
DEGNAN & BATEMAN
(856) 232-7400
Page 50
1 Q. And when a MERS officer is appointed or 2 someone is appointed as a MERS certifying officer, 3 what
does the word certifying mean in certifying 4 officer?
5 A. Just a name.
6 Q. I understand it's just a name, but does 7 it have any meaning at all within the corporate 8 entity? Does a
certifying officer have any
9 responsibilities?
10 A. They have the responsibilities that are 11 enumerated in the Corporate Resolution appointing them 12 a
vice president, assistant secretary.
13 Q. And when, when one of those certifying 14 officers carries out those responsibilities, are they 15 certifying
to something? Are they attesting to the 16 truth and accuracy of what they're doing?
17 MR. BROCHIN: Object to the form of the 18 question.
19 THE WITNESS: They are carrying out the 20 roles that are enumerated in the resolution which 21 authorizes
them to take certain actions and that's 22 what they're doing.
23 BY MR. MALONE:
24 Q. Other than just being a name, to your 25 knowledge, was there any reason the term certifying
DEGNAN & BATEMAN
(856) 232-7400
Page 51
1 officer was selected for purposes of naming these 2 officers?
3 A. It's just a name for the officers, 4 other than the other corporate officers, that were 5 appointed to manage the rest of the functionality of 6 the corporation.
7 Q. So if I follow correctly, sometime back 8 in April of 1998, the issue of appointing certifying 9 officers came up at a board meeting, is that correct? 10 A. Yes.
11 Q. Was that the first time the topic of 12 appointing certifying officers had come up to your 13 knowledge?
14 A. No.
15 Q. When did it first come up?
16 A. It had been there ever since the 17 corporation, since the corporation was reincorporated, 18 I think.
19 Q. When was that that the corporation was 20 reincorporated that you're talking about?
21 A. I think it was in 1995 or '96. 22 Q. And can you give us some background, 23 please, as to why there were
discussions around 1995 24 or 1996 about a need for certifying officers? 25 A. I wasn't there at that time.
DEGNAN & BATEMAN
(856) 232-7400
Page 52
1 Q. And can you just briefly tell us your 2 knowledge of the reason you believe those discussions 3 go back
as early as 1995 or 1996?
4 A. I have seen resolutions that go back 5 earlier than 1998.
6 Q. And the resolutions you saw said what? 7 A. Prior to April of 1998, there were 8 resolutions passed by
the board for each member when 9 requested.
10 Q. And those were resolutions having to do 11 with certifying officers?
12 A. Yes.
13 Q. And is a certifying officer -- prior to 14 April of 1998, when the board would pass a resolution, 15 were
those certifying officers considered officers of 16 the corporation?
17 A. Yes.
18 Q. Do they have corporate powers? 19 A. Yes.
20 Q. And was the appointment of those, those 21 officers, those certifying officers made as a result 22 of an
action by the board of directors?
23 A. Yes.
24 Q. Were those officers, prior to April of 25 1998, called assistant secretaries?
DEGNAN & BATEMAN
(856) 232-7400
Page 53
1 A. I don't recall.
2 Q. Were those officers, prior to April of 3 1998, called vice presidents?
4 A. I don't recall.
5 MR. MALONE: Bobby, do you have the 6 exhibit yet?
7 MR. BROCHIN: I do not.
8 MR. MALONE: The agenda? It's almost 9 12:30, I'm going to suggest we break for lunch until 10 1:30,
hopefully by then you'll have it. If not, we 11 can fax you a copy.
12 MR. BROCHIN: No, I'll have it. I'm 13 sure I'll have it by the end of the lunch break. 14 MR. MALONE:
Let's break for lunch then 15 and resume at 1:30. Thank you.
16 MR. BERNHEIM: Can I ask that somebody 17 e-mail me this exhibit?
18 MR. BROCHIN: Yes, we can go do that. 19 Where do you want it e-mailed?
20 MR. BERNHEIM: Dbernheim at Wilentz dot 21 com.
22 MR. BROCHIN: We will send it to you. 23 MR. MALONE: So we'll adjourn back here 24 at 1:30.
25 MR. BROCHIN: Okay, very good.DEGNAN & BATEMAN
(856) 232-7400
Page 54
1 (Luncheon recess.)
2 (At this point, the deposition 3 continued with another court reporter.) 4 * * * * * * * * * *
5
6
7 MR. MALONE: Bobby, you now have the documents 8 that were sent us last night around 6:30. The first 9
page is marked Agenda. That first page marked Agenda,
10 we're going to have that marked by the court reporter as 11 Hultman-30.
12 (Agenda marked Hultman-30 for Identification) 13 MR. MALONE: The next three pages, the minutes
14 starting on the first page saying minutes and ending on 15 numbered page three signed April 9, 1998 by
Sharon 16 Hortskamp we're going to mark Hultman-31. Let's have 17 that done now.
18 (Minutes marked Hultman-31 for Identification) 19 MR. MALONE: And then the last two pages, one
20 is marked Corporate Resolution, it's blank, and the 21 other is marked Corporate Resolution Mortgage Electronic 22 Registration Systems. We're going to put, and I just 23 want to confirm this with Mr. Hultman, am I correct in 24 reading that the first of these two --
25 MR. BROCHIN: Are you asking that?DEGNAN & BATEMAN
(856) 232-7400
Page 55
1 MR. MALONE: Off the record.
2 (Corporate Resolution marked Hultman-32 for 3 Identification)
4 MR. MALONE: 32 is a two-page exhibit. The 5 first page is captioned Corporate Resolution of Mortgage 6
Electronic Registration Systems, Inc. and has 7 Mr. Hultman's signature of December 20, 2002. The 8 second
page of the exhibit, Hultman-32, is a Corporate 9 Resolution, unsigned, captioned Corporate Resolution.
10 Now that you have the documents, I would like 11 to go through what we attempted to do this morning but 12
could not. I'm going to give the court reporter the 13 stack of the original exhibits and going to go through 14 and
make sure you have the same premarked exhibits. 15 First, in terms of documents provided to us in 16 response
to the subpoena, do you have Hultman Exhibit -- 17 do you have a document marked MERS 1 in the lower 18
right-hand corner?
19 MR. BROCHIN: Yes. I'm going through and I 20 have marked off of your letter. So far I'm up to 21 exhibit
number -- last number I marked is 14. 22 MR. MALONE: Could we start with the witness 23 being shown
Hultman Exhibit 1, please.
24 MR. BROCHIN: Yes, we can do that. 25 BY MR. MALONE:
DEGNAN & BATEMAN
(856) 232-7400
Page 56
1 Q Mr. Hultman, could you describe what that 2 document is?
3 A This is a MIN summary report off of the MERS 4 system relating to a loan by Mr. and Mrs. Ukpe. 5 Q At
the bottom some information appears to have 6 been redacted. Can you tell us what was redacted and 7 why?
8 A No, I cannot.
9 MR. MALONE: We would like to get an 10 unredacted copy of whatever was at the bottom of the 11 page.
We're putting a request in for an unredacted copy 12 listed as a privelege claim.
13 BY MR. MALONE:
14 Q Mr. Hultman, this exhibit, Hultman Exhibit 1, 15 was it produced in response to the subpoena today? 16 A
Yes.
17 Q Turning to Hultman Exhibit 2, can you tell us 18 what this document is?
19 A These are the milestone reports that were 20 generated off the MERS system relating to the same line 21 as
the MIN summary.
22 Q Was this document produced pursuant to the 23 subpoena today by MERS?
24 A Yes.
25 Q And again, there's information that has beenDEGNAN & BATEMAN
(856) 232-7400
Page 57
1 redacted at the bottom of the page. Do you know what 2 the information is?
3 A No.
4 MR. MALONE: And again we'll ask for an 5 unredacted copy of this exhibit unless there's an 6 associative
privelege.
7 BY MR. MALONE:
8 Q Turning to Hultman Exhibit 3, do you have 9 that, please?
10 A I do.
11 Q And it's captioned Agreement for Signing 12 Authority. It is a two-page document. Does your 13 signature
appear on the second page?
14 A Yes.
15 Q And is it dated October 23, 2007?
16 A No.
17 Q Your signature date is not dated October 23rd? 18 A Excuse me. I'm reading the wrong line. Yeah, 19
10-23-07.
20 Q Was this document produced pursuant to the 21 subpoena to MERS?
22 A Yes.
23 Q Turning to Hultman Exhibit 4, two-page 24 document marked in the bottom MERS-5 and MERS-6. Do you
25 have that?
DEGNAN & BATEMAN
(856) 232-7400
Page 58
1 A Yes.
2 Q Was this document produced pursuant to the 3 subpoena?
4 A Yes.
5 Q I would like to spend a moment more on this 6 particular document. It's captioned Corporate 7 Resolution.
Do you see that at the top?
8 A Yes.
9 Q Did the MERS Board of Directors pass this 10 resolution?
11 A The resolution was passed pursuant to the 12 authority that was delegated to me by the Board of 13 Directors.
14 Q My question to you is did the MERS Board of 15 Directors pass this resolution?
16 A By virtue of the delegation to me that's an 17 action of the Board, so they passed the resolution. 18 Q And is
it your testimony -- where is the Board 19 resolution you're talking about that this relates to, 20 Hultman Exhibit
4?
21 A I told you I hadn't reviewed the records so I 22 don't know where that is right now.
23 Q I believe that it's specifically asked for in 24 the subpoena and the follow-up letter requesting 25 documents
and I'm going to ask that the witness be
DEGNAN & BATEMAN
(856) 232-7400
Page 59
1 directed to produce that resolution as a central 2 document in the case and we're going -- we will adjourn 3
the deposition today to a further date until the witness 4 has an opportunity to search for and locate and if it
5 exists, produce that particular resolution. When was 6 that?
7 MR. BROCHIN: Personally it's not relevant, 8 but what -- I think we are all talking about a different 9
resolution, so can you tell us what resolution you are 10 even referring to?
11 MR. MALONE: The question I asked Mr. Hultman 12 a moment ago was whether the Board of Directors
passed a 13 resolution relating to Hultman Exhibit 4 and I'll spell 14 that out a little bit more.
15 BY MR. MALONE:
16 Q Did the Board of Directors appoint a 17 resolution appointing employees of Phelan, Hallinan & 18
Schmieg, L.L.P. as assistant secretaries and 19 vice-presidents of Mortgage Electronic Registration 20 Systems,
Inc., that's the first question. I think 21 Mr. Hultman answered it yes. Is that correct, 22 Mr. Hultman?
23 A That's correct.
24 Q And my next question is -- my next question 25 will be when did the Board pass that resolution
DEGNAN & BATEMAN
(856) 232-7400
Page 60
1 appointing members of Phelan, Hallinan & Schmieg, L.L.P. 2 as assistant secretaries and vice-presidents of
MERS? 3 A The resolution was adopted pursuant to the 4 delegated authority to me on October 23, 2007.
5 MR. BROCHIN: And a copy of that resolution 6 that authorized him has been produced.
7 MR. MALONE: Please, Mr. Brochin. Could I 8 have the last answer by the witness read back. 9 (The
following answer was read by the
10 stenographer: "Answer: The resolution was adopted 11 pursuant to the delegated authority to me on October
23, 12 2007?")
13 BY MR. MALONE:
14 Q So when did the Board meet to pass that 15 resolution, the one referenced in Hultman Exhibit 4?
16 A They didn't.
17 Q When did the Board duly adopt a resolution 18 authorizing the appointment of attorneys from Phelan,
19 Hallinan & Schmieg to be appointed as assistant 20 secretaries and vice-presidents of the corporation?
21 A October 23, 2007.
22 Q And did the Board meet that day, October 23, 23 2007?
24 A No.
25 Q When did the Board meet in relation to thisDEGNAN & BATEMAN
(856) 232-7400
Page 61
1 particular resolution, this Corporate Resolution Hultman 2 Exhibit 4?
3 A They originally met in April of 1998 and 4 delegated me the authority to do this, and so by virtue 5 of the
fact that I had the delegated authority when I 6 appointed them officers on October 23, 2007, that was an 7
action of the Board.
8 Q Your testimony, Mr. Hultman, is back in April 9 of 1998 the Board of a predecessor company authorized
10 you to appoint non-members of MERS as assistant 11 secretaries and vice-presidents of a successor
12 corporation?
13 MR. BROCHIN: Excuse me. Object to the form 14 of the question.
15 Q Go ahead, please answer.
16 A No.
17 Q What did the Board do in April of 1998 in 18 terms of authorizing you to appoint anyone to do 19
anything?
20 A What they authorized me to do was they 21 delegated me the authority to elect persons requested by
22 members to be officers of Mortgage Electronic 23 Registration Systems, Inc.
24 Q What kind of officers?
25 A Assistant secretary and vice-president.DEGNAN & BATEMAN
(856) 232-7400
Page 62
1 Q And your testimony is that is what the Board 2 did in April of 1998?
3 A Yes.
4 Q And that resolution that was passed back in 5 April of 1998 was by a company that as I understand it 6
went out of existence in June of 1998, is that correct? 7 A Yes.
8 Q How does a resolution of a company that went 9 out of existence in June of 1998 become effective 10
October 23, 2007?
11 MR. BROCHIN: Object to the form of the 12 question. Calls for a legal conclusion.
13 Q Answer the question, please.
14 A As I explained to you before, the corporation 15 -- the first MERS corporation went out of existence and
16 the second MERS corporation assumed its duties and 17 obligations and then when the third MERS
corporation was 18 formed, that corporation assumed some of the duties and 19 obligations of the original MERS
vis-a-vis the second 20 MERS. At that point, what I think I said was that I 21 didn't know where the
documentation was that ratified 22 the original resolution.
23 Q I recall some testimony along those lines that 24 certain resolutions were ratified, but not all 25 resolutions
of the prior MERS corporation, is that
DEGNAN & BATEMAN
(856) 232-7400
Page 63
1 correct?
2 MR. BROCHIN: Object to the form of the 3 question. Again, you're asking him about your 4 recollection of
his testimony.
5 Q You answered yes, is that correct?
6 A I'm not sure what question I answered and what 7 question you're asking me now.
8 Q Let me try it again now. I will rephrase it. 9 When MERS, the third MERS corporation came into 10
existence on January 1, 1999, it was a shrunken 11 corporation, correct, it had far less authority than its 12
predecessor corporations, is that fair to say? 13 A I don't know that I would characterize it that 14 way.
15 Q Okay. You indicated previously it had limited 16 authority to deal with title issues, correct? 17 A I don't
think that's the way I characterized 18 it.
19 Q Then I don't want to mischaracterize it. 20 Would you please characterize what the authority of the 21
MERS three corporation was as of January 1, 1999. 22 MR. BROCHIN: Object to the form of the 23 question.
24 A When the third MERS corporation was 25 incorporated, some of the duties and authority that was
DEGNAN & BATEMAN
(856) 232-7400
Page 64
1 exercised by the original two MERS were split off and 2 placed into that company and those are the ones
that 3 relate to acting as mortgagee or acting as beneficiary 4 of loans originated by MERS members that
had chosen, or 5 their borrowers had chosen to make us the mortgagee or 6 beneficiary.
7 Q And at that point on January 1, 1999 the two 8 prior MERS corporations, MERS one and MERS two, had
9 adopted over the course of time numerous resolutions, is 10 that correct?
11 MR. BROCHIN: Object to the form of the 12 question.
13 A Yes.
14 Q And were all of those prior resolutions 15 adopted by MERS three or just some of them?
16 A Some of them.
17 Q Was the resolution of April 9, 1998 granting 18 the secretary the power to appoint certifying officers
19 adopted by the new MERS corporation on or after January 20 1, 1999?
21 A I don't know.
22 Q What would you have to do to find out? 23 A The same thing I told you two hours ago, I 24 would need
to go back and look through the records of 25 that corporation.
DEGNAN & BATEMAN
(856) 232-7400
Page 65
1 Q Then I will make the same request that I made 2 two hours ago that you go back, look through the records
3 of that corporation, please advise your counsel when you 4 have done that, if there is such a document, let us
5 know, if there isn't such a document, let your counsel 6 know, and we will then arrange to resume the
deposition 7 so we can have an answer to that question.
8 MR. BROCHIN: We are writing down all your 9 requests, but I just didn't want you to believe our 10 silence
is an agreement that we're going to have to come 11 back and answer more questions.
12 MR. MALONE: Understood.
13 MR. BROCHIN: I certainly think we are going 14 to make every effort to produce for you those documents,
15 I just don't want you to take that as some agreement 16 that we think it's either relevant or was asked for. 17 MR. MALONE: Okay. Understood, thank you. 18 MR. BROCHIN: Okay, thank you.
19 BY MR. MALONE:
20 Q Mr. Hultman, as corporate secretary of the 21 present MERS -- first off, are you the corporate 22 secretary
of the present MERS corporation, what I have 23 been calling MERS three, the one that came into 24 existence on January 1, 1999?
25 A Yes.
DEGNAN & BATEMAN
(856) 232-7400
Page 66
1 Q And were you the corporate secretary of the 2 prior MERS corporation that we have been calling MERS
3 two?
4 A Yes.
5 Q And were you the corporate secretary of the 6 initial MERS corporation, the one we have been calling 7
MERS one?
8 A I was the corporate secretary at that MERS 9 since I was elected somewhere I think in the March, 10 April
time frame of 1998.
11 Q And were you assistant corporate secretary 12 prior to that?
13 A No.
14 Q Was there an assistant secretary, corporate 15 secretary prior to?
16 A I don't recall.
17 Q As corporate secretary would you tell us, 18 please, what the significance is for MERS three if MERS 19
three did not adopt as one of the resolutions the April 20 9, 1998 resolution by MERS one?
21 MR. BROCHIN: Object to the form to the extent 22 it calls for a legal conclusion.
23 Q Answer the question, please.
24 A I'm sorry, I've lost track of the question. 25 Just ask me again.
DEGNAN & BATEMAN
(856) 232-7400
Page 67
1 Q I will ask the reporter to read it back. 2 (The stenographer read the pending question) 3 A I don't know the
answer to that question. 4 Q Turning to the second page of Hultman Exhibit 5 4, there are a series of attorneys
identified. The 6 second one from the top is a Francis S. Hallinan, 7 Esquire. Do you see that?
8 A Yes.
9 Q Do you know Mr. Hallinan?
10 A Do I know him personally, is that your 11 question?
12 Q Yes, do you know him personally?
13 A I know that he works for the Hallinan Schmieg 14 law firm.
15 Q Other than looking at this piece of paper how 16 do you know that?
17 A I don't know it from this piece of paper. I 18 know it from other corporate records.
19 Q What other corporate records?
20 A The request that was made by Countrywide. 21 Q And this is the e-mail request you mentioned 22 earlier?
23 A I believe so, yes.
24 Q That you have seen, correct?
25 A Yes.
DEGNAN & BATEMAN
(856) 232-7400
Page 68
1 Q How recently did you see that e-mail request? 2 A In the last couple days.
3 Q And again, it has not been produced to us. I 4 asked for it earlier. Is there anything else? You said 5 you
saw corporate records in addition to an e-mail. 6 What else have you seen that led you to believe that 7 Mr.
Hallinan is a MERS officer?
8 A I was probably advised by somebody on my 9 staff.
10 Q And if someone from your staff advised you, do 11 you remember who that was?
12 A No, I do not.
13 Q Do you remember what they said?
14 A I do not.
15 Q Did they give any indication of what 16 documents, if anything, they had looked at before 17 advising you
that Mr. Hallinan was an officer of MERS? 18 A I don't recall.
19 Q Do the assistant secretaries of the 20 corporation report to the secretary of the corporation? 21 A Yes.
22 Q How often does Mr. Hallinan report to you? 23 A I don't believe I've ever spoken to or heard 24 from
him.
25 Q Do the assistant secretaries -- first off, areDEGNAN & BATEMAN
(856) 232-7400
Page 69
1 you a salaried employee of MERS?
2 A No.
3 Q Are you a salaried employee of MERS Corp, 4 Inc.?
5 A Yes.
6 Q Are any of the employees of MERS, Inc. 7 salaried employees?
8 A I don't understand your question.
9 Q Does anyone get a paycheck, if they are an 10 employee of MERS, Inc., do they get a paycheck from 11
Mercer, Inc.?
12 A There is no MERS, Inc.
13 Q I thought, sir, there's a company that was 14 formed January 1, 1999, Mortgage Electronic Registration
15 Systems, Inc. Does it have paid employees?
16 A No, it does not.
17 Q Does it have employees?
18 A No.
19 Q Just so there's not any confusion, I have been 20 using MERS, but I thought we had an agreement earlier
21 today that would be a shorthand for Mortgage Electronic 22 Registration Systems, Inc. Have you been confused? 23 A I was confused because you said MERS, Inc. 24 There is no MERS, Inc.
25 Q Thank you. I will go back to just using MERSDEGNAN & BATEMAN
(856) 232-7400
Page 70
1 then. Does MERS have any salaried employees? 2 A No.
3 Q Does MERS have any employees?
4 A Did they ever have any? I couldn't hear you. 5 Q Does MERS have any employees currently? 6 A No.
7 Q In the last five years has MERS had any 8 employees?
9 A No.
10 Q To whom do the officers of MERS report? 11 A The Board of Directors.
12 Q To your knowledge has Mr. Hallinan ever 13 reported to the Board?
14 A He would have reported through me if there was 15 something to report.
16 Q So if I understand your answer, at least the 17 MERS officers reflected on Hultman Exhibit 4, if they
18 had something to report would report to you even though 19 you're not an employee of MERS, is that
correct? 20 MR. BROCHIN: Object to the form of the 21 question.
22 A That's correct.
23 Q And in what capacity would they report to you? 24 A As a corporate officer. I'm the secretary.
25 Q As a corporate officer of what?
DEGNAN & BATEMAN
(856) 232-7400
Page 71
1 A Of MERS.
2 Q So you are the secretary of MERS, but are not 3 an employee of MERS?
4 A That's correct.
5 Q Does MERS have any policy for auditing the 6 activities of its officers; does MERS audit the activity
7 of its officers?
8 A Well, there is a Board of directors who is 9 responsible for all the activities of the corporation. 10 Q And
my question to you was does MERS audit the 11 activities of its officers?
12 A I don't understand your question.
13 Q How many assistant secretaries have you 14 appointed pursuant to the April 9, 1998 resolution; how 15
many assistant secretaries of MERS have you appointed? 16 A I don't know that number.
17 Q Approximately?
18 A I wouldn't even begin to be able to tell you 19 right now.
20 Q Is it in the thousands?
21 A Yes.
22 Q Have you been doing this all around the 23 country in every state in the country?
24 A Yes.
25 Q And all these officers I understand are unpaidDEGNAN & BATEMAN
(856) 232-7400
Page 72
1 officers of MERS?
2 A Yes.
3 Q And there's no live person who is an employee 4 of MERS that they report to, is that correct, who is an 5
employee?
6 MR. BROCHIN: Object to the form of the 7 question.
8 A There are no employees of MERS.
9 Q To your knowledge has the MERS Board ever 10 audited the activity of any of these thousands of MERS
11 officers that you have appointed?
12 A If you mean by audited do they review and are 13 they responsible for the activities of those officers,
14 the answer is yes.
15 Q Would you explain to us how the Board does 16 that review, what I would call audit?
17 A Through the four corporate officers of MERS 18 consisting of the president, there's two
19 vice-presidents, and a -- excuse me, one vice-president 20 now, and the secretary-treasurer who is me.
21 Q Have you ever investigated a complaint against 22 any of the certifying officers that you have appointed
23 over the years?
24 A Yes.
25 Q Tell us as you recall what the circumstancesDEGNAN & BATEMAN
(856) 232-7400
Page 73
1 were.
2 MR. BROCHIN: Excuse me. Object to the form 3 of the question. Go ahead.
4 A Routinely people ask me to verify that people 5 who have signed instruments are corporate officers and
6 we have a process to review that and verify that people 7 have the proper corporate authority to sign those
8 instruments. We have had complaints about somebody 9 violating our policies and procedures and rules
and we
10 have investigated those and where necessary we have 11 corrected their activities, and so we monitor what
they 12 do and if there is a problem, we resolve it and take 13 appropriate actions.
14 Q Have you ever disciplined any of the corporate 15 officers that you have appointed?
16 A Yes.
17 Q Tell us the circumstances under which you 18 disciplined a corporate officer or officers appointed by
19 you.
20 MR. BROCHIN: Object to the form of the 21 question. Go ahead.
22 A There were attorneys and officers of MERS who 23 violated rules involving foreclosures, and they were
24 sanctioned appropriately.
25 Q What were the rules those attorneys wereDEGNAN & BATEMAN
(856) 232-7400
Page 74
1 violating regarding foreclosures?
2 A There are rules in our rules of procedure 3 about how MERS foreclosures need to be prosecuted in our
4 name, and they hadn't followed those rules.
5 Q And in particular what rule was violated; what 6 conduct did the attorneys engage in that violated the
7 rule?
8 MR. BROCHIN: Object to the form of the 9 question.
10 A Primarily bringing foreclosures in Florida 11 after we suspended them, and bringing foreclosures 12 without
having possession of the promissory note. 13 Q Turning to what has been marked Hultman 14 Exhibit 5, do you
have that in front of you? 15 A Yes, I do.
16 Q Would you tell us what this document is, 17 please.
18 A This is the membership application and 19 agreement for the original member with Bank of New York 20
ID 1579, I think. I can't read it, but I think that's 21 the number.
22 Q And the name of the company is BNY Western 23 Trust, a subsidiary of the Bank of New York, is that 24
correct?
25 A That's what the application says.
DEGNAN & BATEMAN
(856) 232-7400
Page 75
1 Q And to your knowledge have there been 2 successor companies to the company named in this 3 exhibit,
Exhibit 5, and have those successor companies 4 remained MERS members?
5 A Yes.
6 Q And to your knowledge is the Bank of New York 7 Mellon a MERS member?
8 A Yes.
9 Q And prior to a merger between the Bank of New 10 York and Mellon Bank to your knowledge was the
Bank of 11 New York a MERS member?
12 A Yes.
13 Q Did the Bank of New York Western Trust as 14 identified in Exhibit 5 file a process in place for 15
becoming a MERS member?
16 A Restate the question.
17 Q Did they file an application?
18 A Which company?
19 Q The Bank of New York, BNY Western Trust 20 Company.
21 A This would be the application they filed. 22 Q And did the MERS membership rules or 23 membership procedures require someone who wanted to be a 24 member to file an application?
25 A Yes.
DEGNAN & BATEMAN
(856) 232-7400
Page 76
1 Q And was this document employed by MERS in 2 response to the subpoena, that is, Hultman Exhibit 5?
3 A Yes.
4 Q Turning to Hultman Exhibit 6, was it provided 5 by MERS in response to the subpoena?
6 A Yes.
7 Q And this is an application by Countrywide Home 8 Loans for membership, is that correct?
9 A Hang on one second. We are just making sure I 10 have the right materials. Just repeat the question,
11 please.
12 Q Sure. I will rephrase it. Was this an 13 application filed by Countrywide Home Loans to become a
14 member?
15 A Yes.
16 Q Now, is Countrywide Home Loans to your 17 knowledge a different entity than Countrywide Financial
18 Corporation?
19 A Yes.
20 Q Is Countrywide Financial Corporation a member 21 of MERS?
22 A By virtue of the way that their agreement was 23 set up, yes.
24 Q I didn't understand that. Could you explain 25 what it is by virtue of the way their agreement was set
DEGNAN & BATEMAN
(856) 232-7400
Page 77
1 up that Countrywide Financial Corporation is also a 2 member.
3 A There is a letter agreement that is part of 4 the agreement modifying our standard agreement that said 5
hat not just Countrywide, but Countrywide affiliates 6 would also be deemed members of MERS.
7 Q Do you know if that letter agreement has been 8 produced today, that is, a letter agreement that makes 9
Countrywide Financial Corporation a MERS member? 10 A I think it's Exhibit 8.
11 Q I'll turn to Exhibit 8 in a moment then. 12 MR. BROCHIN: Mark, could I ask the first time 13 you introduce
an exhibit by number you also make a 14 reference to the bates stamp numbers?
15 MR. MALONE: Sure, I will be glad to. 16 BY MR. MALONE:
17 Q The exhibit that we are looking at right now, 18 Hultman Exhibit 6, is marked MERS-11, MERS-12.
Do you 19 see that, Mr. Hultman?
20 A I do.
21 Q Turning to Exhibit 7, which is marked MERS-13 22 and MERS-14, do you have that?
23 A I do.
24 Q Was this exhibit, Exhibit 7, produced in 25 response to the subpoena by MERS?
DEGNAN & BATEMAN
(856) 232-7400
Page 78
1 A Yes.
2 Q And could you briefly describe what this 3 exhibit is, what it represents.
4 A It is a letter amendment to our normal rules 5 and procedures.
6 Q And can you tell us the subject matter of the 7 amendment? What areas of the rules and procedures were 8
amended by this agreement?
9 A This allows affiliates -- excuse me, this one 10 is for brokers of Countrywide to use the MERS document,
11 the MERS security instrument, even though they are not a 12 member of MERS. It allows them to be
referenced on the 13 MERS security interest for loans where MERS serves as 14 mortgagee.
15 MR. MALONE: Could I have the last answer read 16 back, please.
17 (The stenographer read the previous answer) 18 Q Could you explain that a little bit more, 19 Mr. Hultman.
20 MR. BROCHIN: Object to the form of the 21 question.
22 A In a table funded relationship where 23 Countrywide controls the production of the documents but 24 is
committed to purchase those loans upon closing, the 25 broker will appear as the payee on the note and so the
DEGNAN & BATEMAN
(856) 232-7400
Page 79
1 reference to MERS as nominee for that broker and its 2 successors it assigns is permitted by virtue of this
3 agreement.
4 Q Are there particular brokers that Countrywide 5 designated pursuant to this agreement that MERS agreed
6 could be the subject of this agreement?
7 A I'm not sure I understand the question, the 8 way it was phrased.
9 Q Does Exhibit 7 address specifically named 10 brokers by Countrywide?
11 A By name?
12 Q By name, yes.
13 A No, it does not.
14 Q The reference in the first line of the exhibit 15 talks about understanding an agreement to deviate from
16 the regular MERS rules. Do you see that?
17 A Yes.
18 Q And what were the regular MERS rules regarding 19 brokers?
20 A I don't think that's what it's referring to. 21 Q I'm sorry, what is it referring to in terms of 22 deviating
from the regular rules?
23 A Normally only members would be referenced in 24 the security interest and we would be nominees for
25 members.
DEGNAN & BATEMAN
(856) 232-7400
Page 80
1 Q And if Countrywide's name appears on the 2 mortgage -- on the note, the promissory note, as the 3 lender,
does that mean that Countrywide originated the 4 loan as compared to a broker?
5 A What it means is that they are the payee of 6 the loan.
7 Q If the broker originated the loan under this 8 deviation, this agreement to deviate, would the broker's
9 name then appear in the mortgage?
10 A It could, yes, it could.
11 Q And in which document in particular or 12 documents would the broker's name appear?
13 A It would be on the note.
14 Q On the note, not the mortgage?
15 A I don't understand your question.
16 Q I'm asking which document would the broker's 17 name appear. You answered on the note, and I'm just
18 confirming that the broker's name would appear on the 19 note as opposed to the mortgage instrument?
20 A No, it would be referenced -- if MERS was 21 serving as the mortgagee for that promissory note,
there 22 would be a reference to the broker in the mortgage 23 instrument.
24 Q This document, Exhibit 7, was produced by MERS 25 in response to our discovery requests.
To your
DEGNAN & BATEMAN
(856) 232-7400
