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
September 25, 2009 by christine
In case you haven’t heard, a Kansas Supreme Court has ruled that MERS has no standing to foreclose.
It was just a matter of time before a court somewhere decided against MERS.
For those of you who don’t know who or what MERS is, it’s the Mortgage Electronic Registration System, essentially an electronic database that was created by the mortgage industry to circumvent the proper recording of deeds at the local level.
They are a private company owned by the banks, and mortgages that are registered with MERS are usually done so at the time of the loan closing. In fact, some of you might have seen the MERS fee of three or four dollars on your HUD-1 settlement statement.
As we mentioned in an earlier blog post on MERS, its alleged status as a “beneficiary” under Deeds of Trusts is false. MERS is an electronic database! MERS is not a beneficiary under any Deeds of Trusts or mortgages and it cannot foreclose because it cannot and does not have standing to.
This decision is significant because there are SIXTY MILLION mortgages registered in their database, about half of all the mortgages in the United States, and MERS has no standing to foreclose on any of them.
It will be interesting to see how the banking industry will maneuver its way out of this mess. In the meantime, millions of homeowners in Kansas just got an extension of time.
I’ll bet the lenders start negotiation with homeowners in Kansas now! They may not have a choice, knowing they cannot foreclose.
You can read the full decision here.
Related posts:
September 25, 2009 by christine
In case you haven’t heard, a Kansas Supreme Court has ruled that MERS has no standing to foreclose.
It was just a matter of time before a court somewhere decided against MERS.
For those of you who don’t know who or what MERS is, it’s the Mortgage Electronic Registration System, essentially an electronic database that was created by the mortgage industry to circumvent the proper recording of deeds at the local level.
They are a private company owned by the banks, and mortgages that are registered with MERS are usually done so at the time of the loan closing. In fact, some of you might have seen the MERS fee of three or four dollars on your HUD-1 settlement statement.
As we mentioned in an earlier blog post on MERS, its alleged status as a “beneficiary” under Deeds of Trusts is false. MERS is an electronic database! MERS is not a beneficiary under any Deeds of Trusts or mortgages and it cannot foreclose because it cannot and does not have standing to.
This decision is significant because there are SIXTY MILLION mortgages registered in their database, about half of all the mortgages in the United States, and MERS has no standing to foreclose on any of them.
It will be interesting to see how the banking industry will maneuver its way out of this mess. In the meantime, millions of homeowners in Kansas just got an extension of time.
I’ll bet the lenders start negotiation with homeowners in Kansas now! They may not have a choice, knowing they cannot foreclose.
You can read the full decision here.
Related posts:
http://www2.ljworld.com/news/2009/sep/24/statehouse-live-parkinson-owns-kpers-error/
September 24, 2009, 9:02 a.m. Updated September 24, 2009, 1:53 p.m.
Topeka — 1:55 p.m.
Some are touting a recent Kansas Supreme Court decision as a major development in the protection of people facing foreclosures.
According to some reports MERS holds some 60 million mortgages, over half of all new U.S. mortgages.
While the case applies only to Kansas, folks who defend homeowners are saying courts in other states could take note of the ruling.
The decision was handed down Aug. 28 and involved a case out of Ford County where a property was foreclosed and sold at auction.
In the complex proceeding, Landmark National Bank was the first lienholder, while MERS claimed to be the second mortgage holder. But the state Supreme Court ruled unanimously that MERS was not legally the owner of the loan. MERS has filed a motion for reconsideration.
The case opinion can be accessed at http://www.kscourts.org/Cases-and-Opinions/opinions/supct/2009/20090828/98489.htm