Showing posts with label MERS. Show all posts
Showing posts with label MERS. Show all posts

Tuesday, March 8, 2011

MERS – Who’s to blame?

The New York Times lays part of the blame for the mortgage collapse at the feed of the Mortgage Electronic Registration System, Inc., we all know as MERS. In a report headlined “MERS? It May Have Swallowed Your Loan” By Michael Powell and Gretchen Morgenson.

“Never heard of MERS? That’s fine with the mortgage banking industry—as MERS is starting to overheat and sputter. If its many detractors are correct, this private corporation, with a full-time staff of fewer than 50 employees, could turn out to be a very public problem for the mortgage industry.”
“Judges, lawmakers, lawyers and housing experts are raising piercing questions about MERS, which stands for Mortgage Electronic Registration Systems, whose private mortgage registry has all but replaced the nation’s public land ownership records. Most questions boil down to this:

“How can MERS claim title to those mortgages, and foreclose on homeowners, when it has not invested a dollar in a single loan?

“And, more fundamentally: Given the evidence that many banks have cut corners and made colossal foreclosure mistakes, does anyone know who owns what or owes what to whom anymore?”
As courts have stepped in to protect defaulting homeowners from the specter of foreclosure, every angle to stick it to the banking industry (and thereby the rest of the consuming public.)

We in the title industry were introduced to MERS as a convenient way to insert a nominee in the chain of title to a mortgage. Gone would be the days of lost assignments of mortgage and deeds of trust—something that gave us many a nightmare.

Instead, this admitted convenience to lenders and the real estate industry has now jumped up and bit the banking industry in the butt.

Examples:
“The Arkansas Supreme Court ruled last year that MERS could no longer file foreclosure proceedings there, because it does not actually make or service any loans. Last month in Utah, a local judge made the no-less-striking decision to let a homeowner rip up his mortgage and walk away debt-free. MERS had claimed ownership of the mortgage, but the judge did not recognize its legal standing.”
“And, on Long Island, a federal bankruptcy judge ruled in February that MERS could no longer act as an “agent” for the owners of mortgage notes. He acknowledged that his decision could erode the foundation of the mortgage business.”
MERS was designed to streamline the ownership system in the days of mortgage securitization “but critics say the MERS system made it far more difficult for homeowners to contest foreclosures, as ownership was harder to ascertain.

Challenges to MERS were raised by county clerks around the country. After all, they would be cut out of a lucrative source of income raised from recording assignments of mortgage, but they lost in light of the nation’s desire to speed up the mortgage process.
“We lost our revenue stream, and Americans lost the ability to immediately know who owned a piece of property,” said Mark Monacelli, the St. Louis County recorder in Duluth, Minn.” (Oh please.)
“Some experts in corporate governance say the legal furor over MERS is overstated. Others describe it as a useful corporation nearly drowning in a flood tide of mortgage foreclosures. But not even the mortgage giant Fannie Mae, an investor in MERS, depends on it these days.”
In any event, MERS is being made the whipping post for a larger problem—greed of lenders and borrowers.

Read the full article at MERS? It May Have Swallowed Your Loan

For your next title order or
if you have questions about what you see here, contact
Stephen M. Flatow, Esq.
Vested Title Inc.
165 Passaic Avenue, Suite 101
Fairfield, NJ 07004
Tel 973-808-6130 - Fax 201-656-4506
E-mail vti@vested.com - www.vested.com
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Tuesday, May 5, 2009

The New York Times takes on MERS

In an attack piece on MERS, short for Mortgage Electronic Registration Systems, The New York Times talks of "the murky realm of MERS," and how a "legal maneuver that has saved banks more than $1 billion over the last decade but made life maddeningly difficult for some troubled homeowners."

Looking for a scapegoat for America's real estate ills, MERS is a good candidate.


"Created by lenders seeking to save millions of dollars on paperwork and public recording fees every time a loan changes hands, MERS is a confidential computer registry for trading mortgage loans."

Of course it's "confidential," who wants outsiders looking at their mortgage documents?
"But with the collapse of the housing market, the name of MERS has been popping up on foreclosure notices and on court dockets across the country, raising many questions about the way this controversial but legal process obscures the tortuous paths of mortgage ownership."
And shades of Abu Ghraib, "controversial" and "tortuous?"

Here's where the Times reporting gets silly:

"In Brooklyn, an elderly homeowner pursuing fraud claims had to go to court to learn the identity of the bank holding his mortgage note, which was concealed in the MERS system."
Is the American homeowner that ignorant that he does not know to whom his payments are being made? And what difference does it make to the homeowner if his loan is part of a pool put together by Goldman Sachs or any other company? The servicer is the servicer; that's where decisions are made.

Read the full article, Tracking Loans Through a Firm That Holds Millions

Vested Title Inc.
648 Newark Avenue, P.O. Box 6453, Jersey City, NJ 07306
Tel 201-656-9220 - Fax 201-656-4506
E-mail vti@vested.com - www.vested.com
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