MERS Scores Big Victory from Courts

Score one for “sanity” this week as the 10th Circuit Court of Appeals upheld rulings from three lower courts that MERS, the beleaguered electronic mortgage registry, does in fact have the right to foreclose on properties assigned through the securitization process.

Over the past several years, any number of consumer advocates, including elected officials and other public watchdogs, have painted MERS as a master of evil, contrived by unscrupulous bankers, all for the purpose of stealing homes from underneath poor and innocent consumers. 

We have noted at several times along the way that most of these advocates of course took advantage of the electronic media to reach their constituents and other fans as efficiently as possible while ignoring the fact that the purpose of MERS was essentially to do the same thing for the historically arcane world of mortgage origination, filing and recording by placing these “securities” into a highly efficient and cost-effective data repository.

The arguments against MERS were wrong-headed then and they continue to be in many corners of the court of public opinion.  Nevertheless, as more time elapses from the hysteria associated with the sub-prime mortgage mess, slowly but surely, sounder heads seem to be prevailing.

Good for MERS and good for all those borrowers and their advocates who never understood a good thing when they saw it!  Banks and other lenders cannot generate more mortgages unless they have an efficient market for selling a portion of their loans to secondary investors.  MERS is a key ingredient to that process and one that cannot be restored to the public confidence soon enough in our opinion.

About markferraris
Managing Principal Orchard Street Partners LLC

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