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Fannie Bars Foreclosure Actions in the Name of MERS
In new policy guidelines released this week, Fannie Mae told servicers that they can no longer name MERS as the plaintiff in any foreclosure action, whether judicial or non-judicial, on a mortgage loan owned or securitized by the GSE.MERS is widely used by the industry to keep track of the servicing rights on home loans. In fact, the top 100 mortgage originators and servicers employ the system. Its repository includes information on over 60 million home loans electronically registered by lenders.MERS was created to be a paperless property registry to facilitate the quick transfer of mortgages between lenders and the inclusion of the loans in mortgage-backed securities, and in certain jurisdictions, MERS has the authority to initiate foreclosures on properties listed in its registry.MERS is often designated as the “mortgagee of record” as a nominee of the actual mortgage holder. The service was designed to get around the slow and clumsy process of recording deeds at a county registrar and is similar to a broker serving as stockholder of record for a client.But the system has become the centerpiece of a number of lawsuits, with foreclosed homeowners challenging the naming of the electronic system as mortgagee.Fannie Mae stated in its new ... more
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