The banking and mortgage industry created the Mortgage Electronic Registration System (MERS) in the 1990s, in an attempt to streamline the mortgage process. Due to widespread incompetence as well as fraud, forgery, and other crimes, a high percentage of all property titles which had a mortgage against them at any time in the past 12-15 years have been adversely affected. When there is not a clear chain of title, (property transfer recorded by the county) the property is then said to have a clouded title, examples of which are a mortgage lien whose repayment hasn’t been officially recorded, or a deed which has been signed but hasn’t been properly recorded. These problems have been exacerbated by securitization, whereby banks put together pools of mortgages, then chop them up into securities (stocks), and sell them to hundreds of different places.
Why you should be concerned
If you are currently paying on, or have recently paid off a mortgage which has been screwed up by MERS, you may not be able to get a clear title when you try to sell the house.
If you are struggling to make mortgage payments, the bank may foreclose illegally, if the title has been screwed up by MERS (steal your house.)
If your mortgage is current or even paid off, your home may get foreclosed upon mistakenly (stolen) due to the paperwork being screwed up. (There have been many documented instances of this around the country, people with NO mortgage getting foreclosed, people with a mortgage at Chase having Citibank foreclose (steal) their home, a house up the street getting mixed up with your house, etc.)
Your home may get foreclosed upon by criminal elements who are able to do this due to the paperwork being screwed up. (This has been going on in California already.)
Like me, you make your mortgage payment to bank A every month for the past several years, paying 30 or 50 or 90 thousand dollars in principal and interest, then bank B comes along and says THEY own the title to your home. Bank A vs. Bank B vs. you – guess who loses?
I was recently reading about documented cases where banks were charging fees to people who no longer owned the home in question. Imagine trying to get that off your credit report.
The fees associated with filing often go unpaid, costing the county governments involved as well as the court costs for straightening things out. Which gets paid for by you and I. A recent article I read from one county official on the east coast estimated $44 million in lost fees due to MERS. These fees would not come from the homeowners, but should have come from the big banks in the securitization / buying / selling of mortgages. The same banks we taxpayers recently bailed out as they were too big to fail. They also appear to be to big to follow laws and too big to pay the proper fees for the business they do.
What to do about it
Inspect your mortgage documents to see if MERS is listed. I have seen reports from professionals in this field state that 80-100 percent of all MERS mortgages are screwed up. My mortgage lists MERS on page 1 of the actual mortgage document.
Get educated: see links below for recommendations, or google any of the bold text above.
Educate others: I and many others far smarter than I feel these issues should be causing much more concern than they have been. These issues are not being fixed at all by the task force Obama announced in his recent state of the union address. These topics should be getting discussed at every city council, county board, and political meeting everywhere in the U.S. As far as I know, this is not the case.
From what I have been able to figure out, if one finds MERS on their mortgage, they should follow these steps:
Get professional legal advice if possible. Someone specializing in real estate law with experience in these exact issues (MERS, chain of title, clouded title, quiet title) would be strongly advised. A ‘securitization audit’ may be something they could also do.
Write to the company you are making mortgage payments to, asking them to produce the ‘wet ink’ copies of mortgage documents. These documents frequently have forged signatures, or have been illegally altered.
If they can’t produce these, file for ‘quiet title‘ in county court. I believe this puts the ball in the bank’s court and they would need to straighten out any irregularities with the county court.
I have not yet had time to investigate the Minnesota laws on this issue, and can’t afford a lawyer, so any advice anyone can offer on these issues in Olmsted County / Minnesota would be greatly appreciated.
Some sources I have used
January issue of Barron’s Magazine had an outstanding article, “Clouded Title: the Gross Illegality of MERS”.
Websites: Naked Capitalism, Business Insider, The Big Picture, and Zero Hedge have had in-depth coverage of these issues over the past few months.
I saw an interview several months ago with Beau Biden, the Vice President’s son, who is Attorney General of Delaware, which is where MERS is headquartered. He was pretty worked up about MERS and the damage it has done to 200+ years of real property recording law in the U.S.
Attorneys General of New York, California, Nevada, Kansas, and several other states have been pretty vocal about these issues, until they get shut down by their handlers.
Many good articles posted to my Facebook page, as well as the Occupy Rochester MN page:
A free internet book by a guy from California, pictures and everything! Trying to sell lots of stuff, but the book is free to download, and very informative.
Let me know if you want more info, I have some printed out stuff, or if you can point me to some good information / people. Email: firstname.lastname@example.org, or stop by the shop. No animals were harmed in the writing of this post. Other than the links, this information came straight out of my head. All assertions have been read by me from multiple credible sources. But I encourage you to – as they say – ‘look it up’. 🙂