The Mortgage Electronic Registration System According to its Executives:
“It was incorporated in 1995 after the mortgage industry studied and recognized the advantage of establishing an electronic tracking system to eliminate Assignments as mortgage servicing rights are transferred from one servicer to another. The basic concept is that MERS will be the mortgagee of record for all mortgages registered with the company, and MERS® System will track the current servicer of the loan as well as the beneficial owner of the Note. Then, when servicing is transferred from one MERS member to another MERS member via a purchase and sale agreement (a contractual non-recordable event), no Assignment of record is needed because MERS remains the mortgage lien holder.” Believe it or not, they basically admit on their own website that the entire purpose of the organization is to circumvent centuries of established precedent for tracking ownership of physical land and the related loans, simply because they did not want to pay fees to county registries that track that ownership for legal purposes.
“Using MERS, lenders can avoid filing Notices of Assignment upon sale of a loan. Lenders realized that because each sale of a mortgage would incur a fee from the recording of the Notice of Assignment (the document that declares the sale to the general public), they would incur hundreds of millions of dollars in fees paid to county recorders. To avoid this cost and the hassle of recording so many documents, the lending industry created MERS to maintain the chain of title and eliminate the need to record assignment of mortgage documents as each mortgage was sold. Here’s how MERS worked. When the loan was created, the lender simply designated MERS as their “nominee” and recorded a document to that effect. Any subsequent change of ownership was tracked in MERS, but no Notice of Assignment was filed at the county recorder. The county records reflected MERS was the owner of the loan, and upon default by the borrower, MERS or the originating lender would foreclose under the notion that they were the current owner of the mortgage. Over sixty million loans were registered in MERS in the last ten years. Using MERS, your lender could sell your loan to an investor or other lender and you wouldn’t know about it. While they would have been paid in full, and no longer own your loan, you would continue to think they were your lender. This could happen many times as loans were sold and resold in the secondary market. By appointing MERS as their nominee your lender hid the fact that they sold your loan and received payment in full.”