MERS vs. country land registrars
In the heat of the foreclosure fiasco, MERS has been singled out for severe criticism by many stakeholders in the mortgage daisy chain.
We've certainly seen a lot of judicial activity around the country. It seems like a new court decision from state judges and bankruptcy judges are handed down every day, both for and against Reston, VA-based MERS. Recall that the registry was founded by banks and the big GSEs in 1995 to essentially automate the mortgage note transfer process. As the new registry took hold, county land registrars were essentially disintermediated. Because mortgages were held by MERS, these mortgages technically were not changing hands every time the mortgage was bought and sold. As a result, banks saved hundreds of millions in transfer fees. County land registrars have long chafed at MERS, but now they are exacting their revenge.
Bloomberg identifies John L. O'Brien, in Salem, Mass., and Jeff L. Thigpen, the register of deeds in Greensboro, N.C., as the leader of the anti-MERS movement.
"In April they asked Iowa Attorney General Tom Miller, who heads a group that's negotiating with banks over wrongful foreclosures, to press for reform. When O'Brien's and Thigpen's letter to Miller made national news, the men began teaching other recorders how to get what they say they're due. Counties in Kentucky, Ohio, Oklahoma, and Texas have filed suit for back fees. In one of the largest cases, Dallas County sued MERS in October, saying the company owes it as much as $100 million."
We'll likely see more suits. One benefit of MERS however is that it forced a lot of land registrars to modernize and automate their operations. Some now rival MERS. If counties are successful in winning big payouts from MERS, the liability could be astronomical.
- here's the article