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.

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.

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?