MERS To Members: Don’t Foreclose In Our Name!

Housing Wire reports:

• Mortgage Electronic Registration Systems, or MERS, told its members Wednesday not to foreclose on residential mortgages in its name. The electronic registry of mortgage records built by Fannie Mae, Freddie Mac and the nation’s major lenders more than a decade ago has been under increasing fire by homeowners, prosecutors, politicians and others.

• The drumbeat against MERS became louder last fall as robo-signing — the signing of foreclosure affidavits of indebtedness en masse, without proper review — surfaced. The robo-signing scandal caused several large servicers to temporarily halt foreclosures as they reviewed their procedures, and prompted an investigation of lenders and their servicing shops by all 50 attorneys general. A proposed settlement could involve some of the nation's biggest servicers.

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• MERS experienced a setback last week, when a N.Y. judge held that MERS could not legally transfer and assign mortgages through its electronic registry. Judge Robert Grossman ruled that the foreclosing lender had to show specific evidence that it was given specific written instructions by its principal.(1)

For more, see MERS to members: Don’t foreclose in our name.

(1) In re Agard, Case No. 810-77338-reg (Bankr. E.D.N.Y. February 10, 2010). For a discussion on Judge Grossman's ruling, see Another Way Banks Make Everyone Pay: The MERS Mortgage Mess.