Why have I not heard of MERS before now?

http://www.nytimes.c...inge-on-mers.html

From the MERS site:

MERS acts as nominee in the county land records for the lender and servicer. Any loan registered on the MERS® System is inoculated against future assignments because MERS remains the mortgagee no matter how many times servicing is traded. MERS as original mortgagee (MOM) is approved by Fannie Mae, Freddie Mac, Ginnie Mae, FHA and VA, California and Utah Housing Finance Agencies, as well as all of the major Wall Street rating agencies.

In plain English, real estate law has long held that every transfer of title needs to be registered with some government authority, typically county recorders. This ensured there was a paper trail showing who owed what to whom, and what was the collateral.

The banks set up a front organization that they would assign as the mortgagee. So as long as the bank holding the old note and the bank holding the new note after a sale are both members, then technically MERS still holds the mortgage and nothing needs to be recorded.

But the MERS machine started to sputter during the foreclosure crisis. Lawyers challenged MERSÂs ability to bring foreclosure proceedings because the system does not technically own the security or note underlying properties, as required.

<snip>

David Pelligrinelli, president of AFX Title, a title search company, said MERS contributed to the problem of thousands of mortgages lacking a complete ownership chain.

ÂYou canÂt go back and redocument all these things, because some of the companies arenÂt around anymore,Â he said. ÂEven if they are, the charters for these companies donÂt allow for backdating of assignments.Â

In other words, the banks invented a structure specifically designed to thwart the intent of the law, but that they could argue complied with the letter of the law.

And now that it's blowing up, it's precisely because they didn't do what the law required.

How is no one in jail for this yet?

PS: How does this square with BeeP's insistence that recording mortgages was a trivial technical exercise?

Post #345,170 by drook 7/25/11 5:04:51 PM Reply	Why have I not heard of MERS before now? http://www.nytimes.c...inge-on-mers.html From the MERS site: MERS acts as nominee in the county land records for the lender and servicer. Any loan registered on the MERS® System is inoculated against future assignments because MERS remains the mortgagee no matter how many times servicing is traded. MERS as original mortgagee (MOM) is approved by Fannie Mae, Freddie Mac, Ginnie Mae, FHA and VA, California and Utah Housing Finance Agencies, as well as all of the major Wall Street rating agencies. In plain English, real estate law has long held that every transfer of title needs to be registered with some government authority, typically county recorders. This ensured there was a paper trail showing who owed what to whom, and what was the collateral. The banks set up a front organization that they would assign as the mortgagee. So as long as the bank holding the old note and the bank holding the new note after a sale are both members, then technically MERS still holds the mortgage and nothing needs to be recorded. But the MERS machine started to sputter during the foreclosure crisis. Lawyers challenged MERSÂs ability to bring foreclosure proceedings because the system does not technically own the security or note underlying properties, as required. <snip> David Pelligrinelli, president of AFX Title, a title search company, said MERS contributed to the problem of thousands of mortgages lacking a complete ownership chain. ÂYou canÂt go back and redocument all these things, because some of the companies arenÂt around anymore,Â he said. ÂEven if they are, the charters for these companies donÂt allow for backdating of assignments.Â In other words, the banks invented a structure specifically designed to thwart the intent of the law, but that they could argue complied with the letter of the law. And now that it's blowing up, it's precisely because they didn't do what the law required. How is no one in jail for this yet? PS: How does this square with BeeP's insistence that recording mortgages was a trivial technical exercise? -- Drew
Post #345,172 by S1mon_Jester 7/25/11 5:23:59 PM Reply	It's been discussed. http://www.nytimes.c...ml?pagewanted=all -How is no one in jail for this yet? Well, worse has happened. Judges have (occasionally) thrown out foreclosures. http://www.housingwi...ot-completely-out http://blogs.wsj.com...l-claims-of-mers/ http://www.housingwi...-mers-foreclosure Thursday, June 16th, 2011, 8:12 am A New York appellate court dismissed a foreclosure action this week, saying Mortgage Electronic Registration Systems failed to properly assign the mortgage and didn't hold the actual promissory note.
Post #345,189 by dmcarls 7/25/11 10:48:34 PM Reply	Some MERS discussions over the last few years Here's some facts about MERS from several years ago: http://ssgoldstar.we...m/post?id=2063120 And the MERS Milestone Report: http://ssgoldstar.we...m/post?id=5367215 I know when I go to look up records at my Recorder of Deed's site, the trail, usually very detailed, stops cold upon a transaction by MERS. How can this type of thing be good for anything (except the banks, of course)?

Welcome to IWETHEY!