The MERS Mystery

A firm with 50 employees located in Reston, Virginia calls MERS claims to hold title to half of all the home mortgages (60 million) in America. That’s one big pile of paper for 50 employees to push around. MERS ( Mortgage Electronic Registration System) was created by Fannie and Freddie and the rest of the big mortgage players to make loan securitizarion easier and faster. Forget about the thousands of county recorders around the nation, MERS would make note assignments and recordings passe. This all worked out until borrowers quit paying. Foreclosing lenders must show standing in court in order to go to auction. Judges are funny that way. In this New York Times piece by Michael Powell and Gretchen Morgenson, the courts are wondering, “How can MERS claim title to those mortgages, and foreclose on homeowners, when it has not invested a dollar in a single loan?”