Implications of the Mortgage Electronic Registration System

Between 1999 and 2008, MERS has been named as a ‘mortgagee’ on over fifty million mortgages. Yet MERS has never originated a single mortgage, nor loaned a dollar to a single borrower. 60% of all mortgages in the U.S. today are legally “owned” by MERS, a Delaware corporation with approximately zero employees.

“These Secondary Mortgage Market Players would claim to package millions of these loans, with or without being delivered the promissory notes, into loan pools or ‘mortgage backed security trusts’ and then flip the loans by selling trillions of dollars of bonds to investors around the world. The bonds were touted by Secondary Mortgage Market Players as producing safe yet high returns. The investors who bought these bonds included many of the world’s largest national banks… Other MERS members, such as title insurance companies, also took their cut from each of the fifty million loans that were made while this high speed gravy train was rolling. MERS itself would earn over a billion dollars a year by charging its members $250.00 for each mortgage that MERS would be named as ‘mortgagee’. The reported profits from the sale of these mortgaged backed securities would result in billions of dollars of salaries and bonuses being paid to the senior executives of many of MERS member corporations.”

A startlingly candid and resoundingly condemning legal opinion of MERS was delivered by Christopher L. Peterson, Associate Dean for Academic Affairs and Professor of Law, University of Utah, in front of the US House Judiciary Committee on December 2, 2010. Professor Peterson says that MERS is a “deceptive and anti‐democratic institution designed to deprive county governments of revenue, and was a contributing factor in the foreclosure crisis and has made resolving foreclosures more difficult”.  He continues, MERS is an anti-democratic institution. It undermines not only the democratically elected county recorders and circumvents the democratically adopted State legislatures’ land title statutes, but it also circumvents the States’ rights by creating a shadow company that is owned by Wall Street banks and insiders and is operated outside of Washington, D.C., without any oversight from the Federal or State governments.” [*]

* (pp 499-518)