Should the MERS System be Re-Vamped or Should it be Allowed to Foreclose on Kansas City Homes?

Kansas City Homes Catch MERS....

The MERS (Mortgage Electronic Registration System) is “absurd” according to New York U.S. Bankruptcy judge.

MERS was designed and funded by 10 mortgage lenders in order to help mortgage originators buy and sell loans in huge bundles of thousands....quickly. The system helps in saving money by avoiding transfer and recording fees but, unfortunately, it appears that at least part of the time the transfer process itself has gone awry.

MERS currently is facing numerous lawsuits dealing with the legality of the process. MERS originated foreclosures are particularly troubling to regulators. As an example, there have been major decisions on regarding MERS in the past few months including a major decision in Kansas in 2009.

Although the Kansas and Massachusetts courts have responded in short order by upholding the MERS system. Most everyone agrees the system has flaws and is not doing making things simpler. In fact, the MERS system has created a more complicated system, especially when bankruptcies and foreclosures are involved.

The Register of Deeds in South Essex County in Massachusetts recently announced a lawsuit against MERS for $22 million in missed recording revenue due to the deliberate creation of a “for-profit private cyber Registry of Deeds whose only purpose was to avoid paying the same fees as everyone else and keeping the public in the dark as to who was the rightful owner of the mortgage.” The press release calls the entire system “a scheme of epic proportions.”

Do you think that the MERS system should be re-vamped? Can it or should it be allowed to continue to foreclose on properties?

RE/MAX sells more homes than any other real estate company.

For a reason...should we talk?

Let us know what you think or add to our blog by writing a comment. Do you have a real estate question for the Real Estate Wizards? Email us at RealEstateWizard@DowellTaggart.com

Blog post written by the Dowell Taggart Team of RE/MAX Best Associates

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