What if there were no MERS? Would the real estate mortgage and servicing industry be any better off? For some people, this is not the right question. The right question--for critics of MERS especially--is whether the system as it currently exists (not how it was originally conceived) is legal.

That, of course, is a burning issue, one that more state judges will perhaps take a stab at later this year. They have plenty of ammunition.

We have noted on several occasions that some huge problems are plaguing the Virginia-based MERS process right now. But some supporters of MERS--or at least the idea of a MERS--have suggested an industry without the central database and world's largest residential mortgagee would be unkind to many. For one thing, the efficiencies would be lost, and ultimately banks would have to make up for that.

At a recent panel of the Mortgage Bankers Association summit on the future of mortgage servicing, someone suggested mortgage rates would ultimately rise to credit card rate levels, according to Housing Wire. Others would argue that many local recordation entities simply couldn't handle the paper volume. In this view, it would be like Wall Street going back to manual processing of paper stock certificates.

Obviously, the best system would be one that honors property and honest property transfers with all legitimate fees properly paid as well as one that preserves efficiency. But are those concepts at odds by their nature? I'd like to know what you think.

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