Formed in 1995 by the mortgage finance industry, MERS was created to increase profits and efficiency by eliminating the need to record changes in mortgage ownership at local government property registries. MERS is a corporation that also acts as a nominee for lenders and their successors.
Babcock said he wonders why local governments and county deed registries have never challenged the MERS system before, because by allowing lenders to bypass the process of recording mortgage transfers with government entities, “millions and millions” in fees to local government have been lost.
But it took the foreclosure crisis to shine the light on MERS, which some have blamed for enabling the mortgage securitization craze and the questionable lending practices that preceded the housing bust. FULL STORY
