MERS at issue in foreclosure fiasco settlement
How to deal with MERS, that much-maligned registry of mortgages that has caused such a firestorm around the country? We have been talking about this at length here and have long considered it an issue that regulators need to resolve, the sooner the better.
Few seem to realize that the Reston, VA-based, mortgager industry-owned firm has taken some steps to change. It agreed to a federal consent decree recently and has since been working on various reforms that should make it more palatable to the industry and thus better able to survive. At the same time, state court decisions--in both directions--keep on coming out.
As I understand it, the new MERS will now register mortgages with local registrars and fees will be paid. But the state attorneys general who are negotiating a broad settlement with banks and servicers may have other remedies in mind. And the Washington Post reports that MERS remains a sticking point. It's unclear exactly what the states want regarding the day-to-day processes of the firm, though they seem bent on not granting any sort of legal immunity to the firm. They are finding that given different approaches and legal rulings across the states, a one-size-fits-all approach is hard to craft.
Beyond the changes that MERS has already instituted, there may be others that would serve it well. In any case, there needs to be an entity to play the DTCC-like role, or we'll end up back in the dark ages. This role does not have to be played by MERS, to be sure. There are some competitors forming. For example, Global Debt Registry is hoping to fill what it sees as a looming void. In any case, this needs to be resolved quickly, for the sake of the industry.
- here's the article