An entity known as Mortgage Electronic Registration Systems (MERS) according to a New York Times Article from March 7, 2011, played a significant role in the collapse of the mortgage industry that occurred in 2008. Some courts have found that MERS is a fictional company that has clouded the true ownership of many mortgages. The model was established by Fannie Mae and Freddie Mac and soon followed by JP Morgan Chase, Bank of America and other large banks; it was seen as a high speed system to make the mortgage securitization easier and cheaper. It also was used to get around filing the appropriate legal documents in the county clerk’s offices, specifically a clerk’s office in Suffolk County New York even refused to accept documents from MERS. A bankruptcy court in New Jersey had refused to allow MERS to have standing to litigate the mortgage in its court. The article also discusses how inaccurate MERS is about denoting who truly owns the mortgages. The design of MERS was to make the transfer of mortgages more efficient but MERS itself is unable to even keep track of the mortgages they own.

Commentary on article by Attorney James E. D. Doern

Although some courts have stricken mortgages it is my legal opinion it’s going to be a very usual situation where a mortgage will be stricken simply because the ownership of it is confused. Most mortgages are dually filed and they are a lien against the property. Somebody owns the mortgage, finding out who may be difficult but just because it’s difficult to find out who owns it doesn’t necessarily mean that the lien will not survive and the court will strike the lien. So for most of our clients the mortgage lien will survive regardless of whether some outfit such as MERS is involved. However, this does not change that this is very difficult to deal with these servicing agents from a consumer standpoint in terms of paying your mortgage and getting any kind of servicing from them and the troubles that have occurred with the HAMP program is detailed in other blogs on this website points out the difficulty of modification of mortgages.