Foreclosures Ensnared in the Tentacles of MERS

May 14th, 2009 | Tags: Foreclosure

Despite innumerable measures by the government there is no let down of the recession. It is mainly because foreclosures are ensnared in the tentacles of the dreaded MERS. MERS is the shortened form of Mortgage Electronic Registration System. It survives in a humble office off Washington shunning publicity. Few have heard about it but lately the cobra is coming out of the holes – being poked out to face the light of the sun.
It was a convenient set up – a sort of cloak for corporate activities. Mortgages began to be made into bundles, sliced and sold to investors across the world. Under normal rules and regulations it would have required public registration but this was avoided with the help of MERS.

The cover up was fine during the heydays of the housing boom when packaging, slicing and investing went on at a hectic speed. But when foreclosures started the name of MERS began to surface. It has started foreclosure proceedings against thousands in the country. The result has been not only the borrowers but the judges have been unable to untangle the mess of mortgage ownership and hone down on the original predatory lender.

A senior citizen of Brooklyn trying to follow up fraud claims learnt from court that the name of the loan originator was kept hidden in this MERS system. In troubled localities like Atlanta, MERS was the prime initiator of foreclosures. Thus advocates find it an impossible task to locate a person with whom one can talk to complained NeighborWorks America – a group engaged in community welfare.

Many critics point the accusing finger at MERS as being the cushion on which the reckless lenders are resting and hiding their faces.

Marie McDonnell of Orleans, Massachusetts analyses mortgages. She said, “I’m convinced that part of the scheme here is to exhaust the resources of consumers and their advocates. This system removes transparency over what’s happening to these mortgage obligations and sows confusion, which can only benefit the banks.”
At the MERS office in Reston a telephone operator was found talking to a confused borrower. She was saying that no help could be offered. The officials of MERS said that such calls often come and all they can do is offer another phone number or a web address from where they can trace the servicer of the loan.
The president of MERS R.K. Arnold said that his firm had benefited not only the banks but also the borrowers because of their money saving tools.