If you've been fighting fraudulent foreclosures or predatory mortgage servicing abuses, odds are good you've heard of Mortgage Electronic Registration Systems, Inc. --better known as MERS.
Over 62 million mortgages are now held in the name of MERS, an electronic recording system devised by and for the convenience of the mortgage industry. Launched as a private company in the 90's MERS promised to be an effective tool, useful for lenders out to streamline the mortgage process. They could track home loans electronically and thereby eliminate the need for lenders to prepare and record assignments when selling or trading mortgage loans.
Things don't always turn out as promised. Complaints alleging MERS has cost municipalities millions of dollars in unpaid recording fees while leaving borrowers with just as many headaches --continue to bring about more lawsuits. As borrowers found their mortgages shuffled around from one lender to another without notice, without legal authority and without proper documentation, many of them found they were unlawfully foreclosed on -or caught up in a mortgage servicing nightmare and living in fear they would be. Various news investigations revealed fabricated documents contaminating court houses across the country. Things appeared to change with this electronic tracking system alright -- but these kind of changes are not positive ones.
Before MERS came into the picture, when a mortgage was sold and transferred to another bank, the bank was responsible for recording the Assignment of Mortgage within their respective county where the property is located. They also had to pay a fee each time.
But MERS changed that equation. Each time MERS doesn't record an Assignment --not only does the county lose filing fees --the borrowers and the county lose sight of who owns the mortgage. And that's a BIG problem.
To foreclose on real property, it's vitally important the real owner of the mortgage is accurately documented in the chain of title. If the chain is dirty -- and broken --so too is any future transfer or sale of property or mortgage. MERS has been sued a number of times and has amassed considerable case law.
MERS has been sued by counties in Kentucky, Michigan, Ohio, Oklahoma and Texas, which also claim the MERS system cheated them out of filing fees. And as the heat turns up; the most recent lawsuits come from a county clerk in Florida -- and the Delaware Attorney General's office.
The Florida lawsuit comes from Jim Fuller, the county clerk of Duval County, and alleges that "MERS has usurped the rights and privileges of the Florida Clerks of Court by establishing, maintaining and inducing lenders to use its private recording system, which unlawfully interferes and competes with the public recording system."
In the Delaware suit, Attorney General Biden asserts that Merscorp Inc., the holding company that owns MERS, uses deceptive trading practices and lists discrepancies in MERS records in regard to foreclosures that occurred in New Castle County, Delaware in 2010.
In September, Dallas County, Texas filed suit against MERS and Bank of America. The suit is over unpaid filing fees and has recently been amended --now seeking to represent all counties in the state of TX who have concerns they have been cheated out of filing fees. Officials of Bexar County, Texas, has approved hiring an outside law firm to help them recover unpaid recording fees, and not surprisingly, additional counties are expected to follow suit.
According to an investigative report from KTSM Channel 9 News; El Paso Country, TX is also reviewing their legal options citing they can no longer afford to ignore this type of potential revenue losses.
And though MERS told KTSM insists any legal claims are without merit and they have not broken any laws and-Texas law requires that county clerks, "...maintain a well-bound alphabetical index to all recorded deeds...mortgages and other instruments relating to real property".
Before MERS was created, individual mortgage lenders like Wells Fargo or Bank of America were the named beneficiary on the deeds of trust; that meant the bank would become the owner of any home it foreclosed. However, with the creation of MERS, 60 percent of all mortgage loans in the country, now list MERS as the beneficiary -and that leaves homeowners confused and creates dirty titles.
Enter Texas homeowner Carol Reeves (Video interview on Channel 9)
Reeves' says the mortgage on her East El Paso home is with Wells Fargo, but MERS is listed as the beneficiary. Reeves' isn't in foreclosure and isn't asking for money -but she is suing MERS for accountability. Reeves' and her attorney Richard Roman say, MERS can't be a beneficiary unless they have a financial stake and since they don't take money in, or pay out money, Reeves' says: they have none.
Each time MERS doesn't record the transfer of a mortgage, it means the respective county isn't getting paid filing fees. With more and more counties tallying up their losses, we can only assume more and more lawsuits may be on the horizon. If any of these lawsuits are successful then they will not only effect change in how and where MERS operates, but they may also open the floodgates of litigation and legislation from other states and dissatisfied homeowners --claiming they too have suffered losses as a result of the under-the-table dealings allegedly going on behind the MERS name --and behind their backs. Time will tell.
Over 62 million mortgages are now held in the name of MERS, an electronic recording system devised by and for the convenience of the mortgage industry. Launched as a private company in the 90's MERS promised to be an effective tool, useful for lenders out to streamline the mortgage process. They could track home loans electronically and thereby eliminate the need for lenders to prepare and record assignments when selling or trading mortgage loans.
Things don't always turn out as promised. Complaints alleging MERS has cost municipalities millions of dollars in unpaid recording fees while leaving borrowers with just as many headaches --continue to bring about more lawsuits. As borrowers found their mortgages shuffled around from one lender to another without notice, without legal authority and without proper documentation, many of them found they were unlawfully foreclosed on -or caught up in a mortgage servicing nightmare and living in fear they would be. Various news investigations revealed fabricated documents contaminating court houses across the country. Things appeared to change with this electronic tracking system alright -- but these kind of changes are not positive ones.
Before MERS came into the picture, when a mortgage was sold and transferred to another bank, the bank was responsible for recording the Assignment of Mortgage within their respective county where the property is located. They also had to pay a fee each time.
But MERS changed that equation. Each time MERS doesn't record an Assignment --not only does the county lose filing fees --the borrowers and the county lose sight of who owns the mortgage. And that's a BIG problem.
To foreclose on real property, it's vitally important the real owner of the mortgage is accurately documented in the chain of title. If the chain is dirty -- and broken --so too is any future transfer or sale of property or mortgage. MERS has been sued a number of times and has amassed considerable case law.
MERS has been sued by counties in Kentucky, Michigan, Ohio, Oklahoma and Texas, which also claim the MERS system cheated them out of filing fees. And as the heat turns up; the most recent lawsuits come from a county clerk in Florida -- and the Delaware Attorney General's office.
The Florida lawsuit comes from Jim Fuller, the county clerk of Duval County, and alleges that "MERS has usurped the rights and privileges of the Florida Clerks of Court by establishing, maintaining and inducing lenders to use its private recording system, which unlawfully interferes and competes with the public recording system."
In the Delaware suit, Attorney General Biden asserts that Merscorp Inc., the holding company that owns MERS, uses deceptive trading practices and lists discrepancies in MERS records in regard to foreclosures that occurred in New Castle County, Delaware in 2010.
In September, Dallas County, Texas filed suit against MERS and Bank of America. The suit is over unpaid filing fees and has recently been amended --now seeking to represent all counties in the state of TX who have concerns they have been cheated out of filing fees. Officials of Bexar County, Texas, has approved hiring an outside law firm to help them recover unpaid recording fees, and not surprisingly, additional counties are expected to follow suit.
According to an investigative report from KTSM Channel 9 News; El Paso Country, TX is also reviewing their legal options citing they can no longer afford to ignore this type of potential revenue losses.
And though MERS told KTSM insists any legal claims are without merit and they have not broken any laws and-Texas law requires that county clerks, "...maintain a well-bound alphabetical index to all recorded deeds...mortgages and other instruments relating to real property".
Before MERS was created, individual mortgage lenders like Wells Fargo or Bank of America were the named beneficiary on the deeds of trust; that meant the bank would become the owner of any home it foreclosed. However, with the creation of MERS, 60 percent of all mortgage loans in the country, now list MERS as the beneficiary -and that leaves homeowners confused and creates dirty titles.
Enter Texas homeowner Carol Reeves (Video interview on Channel 9)
Reeves' says the mortgage on her East El Paso home is with Wells Fargo, but MERS is listed as the beneficiary. Reeves' isn't in foreclosure and isn't asking for money -but she is suing MERS for accountability. Reeves' and her attorney Richard Roman say, MERS can't be a beneficiary unless they have a financial stake and since they don't take money in, or pay out money, Reeves' says: they have none.
Each time MERS doesn't record the transfer of a mortgage, it means the respective county isn't getting paid filing fees. With more and more counties tallying up their losses, we can only assume more and more lawsuits may be on the horizon. If any of these lawsuits are successful then they will not only effect change in how and where MERS operates, but they may also open the floodgates of litigation and legislation from other states and dissatisfied homeowners --claiming they too have suffered losses as a result of the under-the-table dealings allegedly going on behind the MERS name --and behind their backs. Time will tell.
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At 21 years old , we were sold a house we could not afford a hyped up appraisel.
Incorrect income documents, no money down, but with over 100,000. shown being put down. Adjustable % rate. Now forclosed on with with wife and 2 children Mers also handles our acccount.Realtor put cash in his pocket did not show on contract.Had money to stop forclosure attorney or mortgage co would not call me back.