Posted by Susan Fischer on 1/4/11 6:30pm
Msg #366999

Ran across this on MERS:

http://exiledonline.com/dude-wheres-my-mortgage-how-an-obscure-outfit-called-mers-is-subverting-our-entire-system-of-property-rights/

Wow. I did not realize the extent MERS was involved.

Reply by nobhill on 1/4/11 7:52pm
Msg #367017

Yup, it's true.

Reply by Heather Smith on 1/4/11 8:17pm
Msg #367021

So true, thanks for posting Susan!

Reply by Pat/IL on 1/4/11 9:55pm
Msg #367026

Having read Professor Peterson's report over the weekend (what can I say, I'm a nerd), I can say confidently that the article above, which relies almost exclusively on Peterson's work, is a nearly complete bastardization of his efforts.

The inaccuracies in the linked article are too numerous to address in the time I'm willing to devote, and the conclusions it draws are absurd. Peterson's report is excellent and can be found on the internet easily.

I'm certainly no fan of MERS, and I agree the MERS members have done a lot of damage to the integrity of the public land records. And, yes, they avoided recording fees by not recording assignments when the ownership of the notes changed hands. It's bad stuff. But, the linked article is overblown beyond recognition, so I thought it should be pointed out.

Reply by James Dawson on 1/5/11 1:13am
Msg #367032

Fully agree Pat if for no other reason then to mention the fact that there are no names "there". Same argument can be made about fuel, milk, travel and SS!

Reply by ReneeK_MI on 1/5/11 7:27am
Msg #367044

Agree, like everything else, there's always a flip side

While MERS was undoubtedly designed to help streamline selling mtgs and get out of paying the costs to record each assignment - I can remember when my home county was 6 mos+ behind in recordings. Surely that HAS to be worst-case, but it wasn't likely the ONLY county with significant delays. That alone created huge risks all around.

Hard to take the article seriously when it blames MERS for the huge increase in mtg fraud (just coincidentally during the hay-day of the sub-prime debacle)?

If MERS hadn't failed to track as it was designed & intended to, it wouldn't be in the headlines. The idea itself I don't find so terrible - though the counties losing all that income of course won't agree. I have to wonder how behind the average recording time would have become, if MERS hadn't been implemented.

It seems to me (in my barely able to comprehend little brain) that MERS is a convenient target for cash-strapped municipalities to bite into, but it was a potentially good tool that was ALSO used by ill-intended people (i.e. certain banks & investors) to speed up their ability to pass along high-risk mtgs.

Interestingly, I see MERS on just about every mtg, still.

Reply by jba/fl on 1/5/11 7:58am
Msg #367050

Re: Agree, like everything else, there's always a flip side

"Interestingly, I see MERS on just about every mtg, still."

Same here - I don't get it.

Another thought though: If they are getting out of costs of recording, isn[t that fraudulent in some manner as the BO has already paid those costs? Was the BO refunded what they were charged and not needed? Perhaps I missed something here.

Reply by ReneeK_MI on 1/5/11 8:07am
Msg #367053

No ...

Borrowers pay to have their mtg recorded, and it is recorded.

Every time a mortgage is sold or "assigned" to another mortgagee, that Assignment is supposed to be recorded, and that would be another recording fee.

To get around that, the mortgagee on the initial mortgage that's recorded shows MERS as the agent (can't recall exact term, but effectively the agent) of the mortgagee, with a MERS number. MERS remains the agent on the record - and INSTEAD of recording an Assignment every time that mtg is sold, MERS is supposed to track where the Note is going, who is holding it. So, all those transfers of the Note are not made part of the public record.

In theory - anyone could go to the record, find the recorded mtg, get the MERS number - give it to MERS, and they'd be able to say "Oh - that Note is now held by ScumBank".

In theory. What remains to be illuminated is - who dropped the ball? Did MERS fail to track, or did these banks FAIL to notify MERS of every transfer, or a combination of both?

Reply by jba/fl on 1/5/11 8:10am
Msg #367055

Ahhh - thanks. Nice clarification. n/m