Last week New York Judge Robert Grossman ruled that all of MERS’ business practices are illegal.
It’s a staggering blow to the banks and their endless efforts to circumvent due process. It has the potential to once again slow down the foreclosure process.
The foreclosure registry was set up by the banks with one purpose in mind, to make securitizing mortgages easier for them.
And homeowners, as is usually the case with matters relating to bundled mortgages, were getting screwed.
Here’s the short explanation. MERS allowed the banks to bypass public record keeping, all in an effort to streamline the records that banks were using to foreclose.
Local record keeping regulations might have been cumbersome for the banks to keep up with, but it protected the homeowners and provided transparency.
By allowing the banks to essentially hijack an important part of the record keeping process, namely the recording of each time a mortgage was sold to a different investor, banks had much greater control then than they ever should have been allowed to.
Banks can talk about streamlining the process as the reason behind MERS all they want, but the effect was that it was much more difficult for homeowners to see who currently owned their mortgage, and it just allowed the banks to be sloppy with their records, and they were.
MERS was separating the notes from the mortgages, again so they could be securitized, yet in the case that was brought before Grossman, their lawyers argued they could still foreclose because in theory, the mortgage follows the note.
Except in in this case it didn’t.
MERS was doing one thing, but telling the courts they weren’t.
They tried to have their cake, and eat it too.
Thankfully Judge Grossman didn’t buy any of their arguments; and now the banks are reeling.
Almost all of the fraud I’ve seen perpetuated by the banks comes back to their efforts to service the Wall Street mortgage packaging machine in some form or another, and MERS is no exception.
Once again the banks tried to deny homeowners their rights, and forgot that the homeowners are their customers!!!
Any other business that showed such blatant disregard for their clientele would have never had survived.
Judge Grossman saw through MERS thinly veiled attempt of a business model, and ripped it to shreds.
Don’t expect me to be among the King’s Men. I will not be putting MERS back together again.