Mortgage Insecuritization: Pennsylvania Clerks Take on MERS


Mortgage Insecuritization: Pennsylvania Clerks Take on MERS

Mortgage Insecuritization: Pennsylvania Clerks Take on MERS

The Legal Intellingencer-

Two class action lawsuits are winding their way through the courts in Pennsylvania. Both involve county clerks as plaintiffs, and Mortgage Electronic Registration Systems Inc., or MERS, either as a defendant or a participant in allegedly fraudulent practices. They both point to larger problems within the residential mortgage sector.

Having suffered through the subprime mortgage meltdown of 2008, the robo-signing misadventures that led five major banks to enter into a $25 billion settlement agreement with 49 states’ attorneys general, and after a decade of devaluation in the housing market, you would think the financial market had learned its lesson, that government reforms had been effective and that the mortgage financial market and its investors would have been restored to a secure foundation. But these cases indicate otherwise, bringing to light systemic problems that could exacerbate another market disruption, the tip of a burgeoning iceberg threatening havoc against the nation’s homeowners and investment markets worldwide.

MERS began in the early 1990s when an interagency task force, formed by the Mortgage Bankers Association, Fannie Mae, Freddie Mac and Ginnie Mae, recommended an industry-sponsored central repository to register and track the ownership of mortgage interests. MERS was officially launched in 1997. The concept was straightforward: residential mortgages would be issued a unique mortgage identification number that MERS would record in its database and track. As a mortgage loan moved between trading partners, beginning with the originating lender, the securitizer (Fannie, Freddie), then on to secondary-market investors, since each party typically assigned its own account number to the asset, the use of a centrally assigned identification number facilitated standardized tracking throughout the process.

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2 Responses to “Mortgage Insecuritization: Pennsylvania Clerks Take on MERS”

  1. crittermom says:

    Wahhh! I wish I could read more.
    The link just loops back to this same article…

  2. dinsfla says:

    Thank you for letting me know. The link is fixed.


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