A column by business writer Floyd Norris in today's New York Times revisits issues that have arisen around the country regarding the legality of MERS, the central agent for holding mortgages that was created by the lending industry a decade ago. The concept was for MERS to hold title to mortgages while the underlying promissory notes were negotiated to investors. In concept, this would eliminate the need to record an assignment of mortgage every time the note was transferred.
This system seemed to work fine when the real estate market was booming but now that the market has crashed more scrutiny is being placed on the entire concept of MERS. The argument, advanced by attorneys for defaulting borrowers and by some law professors, is that the entire basis of MERS, the separation of the mortgage from the note, violates several hundred years of American property law without any legislative action.
I'm not sure how this issue should be decided, but if it is held that the MERS model is invalid, it will be a real mess for everyone.
Tuesday, October 19, 2010
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Essex County Register of Deeds John O’Brien on Nov. 18 announced he has sent a letter to Attorney General Martha Coakley requesting that she investigate whether or not the Mortgage Electronic Registration Systems, Inc. has failed to pay the proper recording fees required when a lender assigns a mortgage to another entity.
http://www.wickedlocal.com/salem/news/x1384140964/Register-of-Deeds-asks-AG-to-investigate-mortgage-group
Shouldn't the Middlesex County Registrars be joining in this investigation?
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