Dude, Where’s My Mortgage?

How an Obscure Outfit Called MERS Is Subverting Our Entire System of Property Rights – Mortgage Electronic Registration Systems MERS on wikipedia

Published on AlterNet, by Yasha Levine, December 16, 2010.

  • Banks have scrambled America’s system of private property ownership to the point that no one knows who owns what.
  • “For the first time in the nation’s history, there is no longer an authoritative, public record of who owns land in each county.” (University of Utah law professor Christopher Peterson)

There is an unbelievable scandal in the making that threatens to subvert our four-century-old method for guaranteeing a fundamental building block of the American republic—property ownership. The biggest reason why you probably haven’t heard much about it is that it involves one of the most generic and boring company names imaginable: Mortgage Electronic Registration Systems, Inc., or MERS. 

It is a story of deception engineered at the highest level of power for short-term gain, and another epic failure of the private sector to uphold the laws and traditions of American society, even something as fundamental as property rights.

Created in 1995 by the country’s biggest banks, MERS quietly took control of and privatized mortgage record-keeping across the country and, in the span of a few years, scrambled America’s private property ownership records to the point where no one could figure out who owns what … //

… And that is what MERS was for. It was created to help the industry push its latest money-maker: mortgage-backed securities, a Wall Street financial scam that dressed up the most toxic, guaranteed-to-fail loans as Grade A investment vehicles that could be sold to suckers looking for an easy gain.

But before mortgage-backed securities could be unleashed on the residential housing market on a massive scale, bankers needed to get rid of America’s long-standing real estate recording laws, which required lenders to file all mortgage transactions—the origination of a new loan, for instance, or the transfer or sale of a mortgage between banks—with the county in which the property is located. While this recording requirement was not a problem in the sleepy pre-securitization days of the home loan business, when mortgage transactions were kept to a minimum, it was going to be much more difficult—if not impossible—with widespread use of securitization, which jacked up the industry like high-grade meth. Mortgages would be changing hands dozens of times, going from loan originators to banks to Wall Street investment houses, which would collect them by the thousands and package them into complex debt instruments that would be chopped up into shares and sold off to multiple investors all over the world. (full text).

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