Your Distressed Property and Short Sale Expert in Maryland
Will MERS(Mortgage Electronic Registration System) ever figure out who owns the mortgages supporting the financial securities based on bundled mortgages - probably including yours!
Proposed to help automate and speed up the process of selling mortgages. MERS was begun in the early 1990s to replace the need to hand carry each mortgage transfer to the county courthouse in which the respective property existed - but also had the effect of bypassing the local authorities AND not paying transfer taxes to localities- who are responsible for recording ownership details in the public record.
MERS has over 67 million mortgages on file - or over 60% of the United States' residential mortgagfes, but only employees 45 people!
Besides reducing time to change ownership of mortgages, which costs about $210 million in 1990, MERS enables the securitization of mortgages into mortgage backed securities. We all know what happened eventually - bad loans, bad security ratings, bad economy!
Recent lawsuits have charged MERS with owing unpaid county recording fees, and some states courts are blocking attempts from MERS to foreclose on homes of borrowers. States are saying that MERS can not be listed as the mortgage holder without actually owning the loan.
When the Mortgage Bankers Association initiated the MERS plan they modeled it on the firm that is a clearing house for stocks called the Depository Trust Corporation - they hold the physical stocks but electronically transfer ownership, and that works well.
However, shortcuts were taken - MERS dropped the idea of holding actual documents - and left originating companies responsible for protecting mortgages and promisory notes, and bacme a manager of who owned a loan at any particular time..
Concerns were:1) Could consumers access information; 2) how would data errors be corrected; 3) whether the registery was consistenc with state laws; 4) whether the chain of title would be broken if documents wern't recorder properly; 5) whether too much power would be concentrated inthe hands of those who managed the registry.
Thus MERS became the nominee for mortgage holders in county courthouses, and when a loan changed hands there was electronic registration in MERS, but no transfer at the local level. One ocunty recored stated that if paprework had been recorded in local offices, thaer would be no problem.
What do you think? Can MERS be made compliant with state laws, become compliant with them, or shold it be discontinued?
Dennis
www.MarylandDistressedProperties.com
www.Frederick-MontgomeryCountyHomes.com
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