MERS. You might have heard the word but what does it have to do with your mortgage? Look on your Deed of Trust or Note and see if it has a MERS # in the top right hand corner or if it mentions Mortgage Electronic Registration System (“MERS”). If so welcome to the club.
Below you’ll find a short summery of how MERS is involved but bottom line is this…If MERS is on your loan docs you can be virtually assured it has been sliced/diced/pureed and the actual owner or holder of your original Promissory Note is out of the picture. Meaning what? You should strongly consider challenging you current mortgage servicer to cut you a better deal then you have now. How about 2% interest rate? Sound like a fairy tale? It’s reality in our office.
- The Bank Slayer
MERS Summary
During the securitization process, a mortgage is initiated – and then immediately sold to a 3rd-party. Once holding this mortgage, bankers slice-and-dice them until they can package and sell them in neat little bundles until no one can tell who holds clear, legal title to these mortgages. So how can any investor of a mortgage-backed security know that it really has some collateral (mortgage)?
This is why the banks created MERS. As Pam Martens, whom has worked on Wall Street for 21 years writes, “MERS is nothing more than a confidential electronic registry which exists only to ―track mortgages and the changes of servicing rights and mortgage ownership”. In other words, it has no proprietary interest in these mortgages. The reason why that last fact is so important is because of the fact that Wall Street had created such convoluted chains of ―ownership that even in court proceedings the banksters are unable to show any party in these chains of transactions as having clear title to the mortgage. Wall Street’s plan was to send MERS (nothing but a glorified, electronic clerk) to all these foreclosure proceedings and allow MERS to act as if it was the mortgage-holder in these proceedings.”
However, it is one of the oldest principals of our Western legal system that in civil proceedings any party wanting to bring an action before the court has to have ―standing. Typically, this is defined as a direct, proprietary interest in the subject of the trial. Clearly, MERS has no proprietary interest – and thus in several legal decisions it has been found to have no right to initiate foreclosure proceedings.
Here are some interesting data points we’ve uncovered from various sources…
- MERS is never the owner of the promissory note for which it seeks foreclosure.
- MERS has no legal or beneficial interest in the promissory note underlying the security instrument for which it serves as “nominee”.
- MERS has no legal or beneficial interest in the loan instrument underlying the security instrument for which it serves as “nominee”
- MERS has no legal or beneficial interest in the mortgage indebtedness underlying the security instrument for which it serves as “nominee”.
- MERS has no interest at all in the promissory note evidencing the mortgage indebtedness.
- MERS is not a party to the alleged mortgage indebtedness underlying the security instrument for which it serves as “nominee”.
- MERS has no financial or other interest in whether or not a mortgage loan is repaid.
- MERS is not the owner of the promissory note secured by the mortgage and has no rights to the payments made by the debtor on such promissory note.
- MERS does not make or acquire promissory notes or debt instruments of any nature and therefore cannot be said to be acquiring mortgage loans.
- MERS has no interest in the notes secured by mortgages or the mortgage servicing rights related thereto.
- MERS does not acquire any interest (legal or beneficial) in the loan instrument (i.e., the promissory note or other debt instrument).
- MERS has no rights whatsoever to any payments made on account of such mortgage loans, to any servicing rights related to such mortgage loans, or to any mortgaged properties securing such mortgage loans.
- The note owner appoints MERS to be its agent to only hold the mortgage lien interest, not to hold any interest in the note.
- MERS does not hold any interest (legal or beneficial) in the promissory notes that are secured by such mortgages or in any servicing rights associated with the mortgage loan.
- The debtor on the note owes no obligation to MERS and does not pay MERS on the note.
You write: >>> Meaning what? You should strongly consider challenging your current mortgage servicer to cut you a better deal then you have now. How about 2% interest rate? Sound like a fairy tale?
Thanks for all this info. It looks as if we’re “in the club” but I’m not sure that I understand what that means exactly. What DOES this mean exactly in layman’s terms? Does it mean that we really HAVE no mortgage holder? or that our servicer does not legally own our note? If they do not own it why would we be obligated to pay them anything at all? How would we approach our servicer with this info? What reason would we give the them for wanting a better deal?
What it means is that MERS separated the mortgage from the deed creating a worthless piece of paper and obliterated ownership.
What this means is MERS has no standing to foreclose and no standing to deliver clear title.
What this means is that if you find MERS on your mortgage, you can demand them to show you clear chain of title. When they don’t, sue them to force compliance and put all of your mortgage payments into an interest bearing account.
When you get to court, come with a cashier’s check for all of your past mortgage payments, not late fees or penalties. Also have a complete record of deposits.
If they prove to the court’s satisfaction they can deliver clear chain of title, relinquish the check, and go back to life as you knew it. Don’t forget to have them report you as gold to the credit agencies.
When they can’t, ask the courts to award you clear title and the return of all monies paid into that account.
What this means is, you end up with clear title, no more mortgage payment, and a large chunk of cash to do with as you see fit.
The banks are way ahead of you on this. Look on your “Deed of Trust” or “Note” and see if it has a MERS number in the top right hand corner, or if it mentions Mortgage Electronic Registration System (“MERS”). There will also be what is called a (“MIN”) or Mortgage Identification Number. When the mortgage is being securitized, this means being turned into something that can be sold into this crooked institution known as Wall Street (sorry, personal opinion). Then it is sliced, and diced into these neat little packages called tranches to the point no one could track who owns what part of your mortgage. That is why MERS was created and each little tranche given a MIN. MERS is nothing more than a bank owned electronic registry. It allows Wall Street to trade these packages at light speed keeping track of them by the MIN number on the MERS. It also means the banks don’t have to pay recording fees each time the NOTE is transferred. What I find utterly delightful is these big banks may have out smarted themselves because in many court actions involving foreclosure the judge has ruled that “MERS” is not the owner of the NOTE for which the bank seeks foreclosure. Ultimately what will happen is the big money banks will pay their lobbyist to Have Barney Frank & Dick Todd pen new legislation that gives them the right to do whatever they want.
They are sneaky but the tide is beginning to turn. We’ll see how we fair over the next several months. Texas doesn’t have definitive MERS cases, yet.
So what does it mean if the “MIN status” of a loan shows “Inactive” on the MERS website?
We’re currently attempting to PURCHASE a home through a short sale (with BofA supposedly acting as “representative” of a group of “investors”). Apparently there were two loans (dated 2001 and 2004…with CitiMortgage and Bank of America, respectively, listed as the “mortgage servicers”) associated with the property (which makes sense, since we know that the owners purchased the home in 2002 and did an extensive remodel in 2004). Both these loans are listed as “MIN status: Inactive” on the MERS website.
According to a Q & A (answered by an “administrator”) on the MERS website, “A MIN can be reported as inactive due to multiple reasons, payoff, foreclosure, reversed registration, transfer to non MERS servicer, etc. We would need more information about a particular inactive MIN to correctly respond to your question.”
So at this point, we’re assuming that the original loans were transferred to an “investor” (or investor group…although they’ve just been referred to by our agent as an “investor”) at some point in time.
I guess I’m just wondering if a mortgage was “transferred” (I assume that means “sold”) at some point in time, does the entity to whom it was “transferred” (an “investor,” in this case) actually have the legal right to sell the property?
Sadly, I don’t even understand enough about short sales and mortgage securitization to grasp why it is that the current “owners” of the home (who no longer even live in the area) are listed as the “Seller” on the purchase agreements we’ve signed thus far. We’re still near the early stages of the purchasing process (we haven’t made a deposit or down-payment yet), but that’s only after waiting for months for approval of the actual purchase price. It sure would be nice to know whether or not we’ll actually have legal ownership after we hand over a SIGNIFICANT chunk of our like savings to buy this home.
Seems like the financial industry REALLY messed up with the creation and implementation of MERS. Whether intentional or accidental, the uncertainty as to legal ownership and “title chain” is making me nervous (and more than a little regretful) about even attempting to buy this house. Unfortunately, my wife REALLY likes this one…and we’ve been searching for a home for two and a half years now. She would not be happy AT ALL if I suggested that we look elsewhere. The only idea I have right now as to protecting ourselves from any amibiguity is to purchase or own title insurance policy…but I’m not even sure if that would resolve any of the ambiguity. All we want to do is buy this house legally (and be able to sell it legally at some point in the future). I would hate to find out in a year or two -after handing over our life savings to some mysterious “investor” – that our ownership of the home is in question.