UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
_________________________________________
No. 14-4315
_________________________________________
MONTGOMERY COUNTY, PENNSYLVANIA, RECORDER OF DEEDS, by
and through NANCY J. BECKER, in her official capacity as the Recorder of
Deeds of Montgomery County, Pennsylvania,
Plaintiff-Appellee,
v.
MERSCORP, INC., and MORTGAGE ELECTRONIC
REGISTRATION SYSTEMS, INC.
Defendants-Appellants.
_________________________________________
Appeal from the July 11, 2014 decision of the United States District
Court for the Eastern District of Pennsylvania Civil Action No. 11-CV-06968
(Honorable Curtis Joyner) certified for interlocutory appeal on
September 8, 2014
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BRIEF OF AMICUS CURIAE THE LEGAL SERVICES CENTER
OF HARVARD LAW SCHOOL AND LAW PROFESSORS
IN SUPPORT OF THE APPELLEE
_________________________________________
MAX WEINSTEIN
CHARLES CARRIERE
K-SUE PARK
LEGAL SERVICES CENTER OF
HARVARD LAW SCHOOL
120 Boylston Street
Jamaica Plain, MA
(617) 390-2694
CORPORATE DISCLOSURE STATEMENT
The Legal Services Center is a program of Harvard Law School at Harvard
University, a 501(c)(3) non-profit organization. No party, party’s counsel, nor any
person other than the amicus curiae authored any part of the brief, nor contributed
money intended to fund preparing or submitting the brief.
TABLE OF CONTENTS
STATEMENT OF INTEREST……………………………………………………….. 1
ISSUE TO BE ADDRESSED………………………………………………………. 1
SUMMARY OF ARGUMENT…………………………………………………….. 1
ARGUMENT……………………………………………………………………………….. 4
I. MERS is a departure from and disruption of the traditional recording
practices, upon which it relies………………………………………………….. 4
A. Prior to MERS, records of real property interests were public,
transparent, and provided a secure foundation upon which the
American economy could grow……………………………………. 4
B. MERS was created to reduce costs for sellers of mortgage-backed
securities (MBS)………………………………………………………. 6
C. The MERS structure substitutes the MERS name for that of the
mortgage lender in the county registry………………………………. 8
D. MERS privatized and made the documentation of transfers of
mortgage notes optional, discouraging the mortgage industry from
maintaining complete records of actual holders of interests in real
property……………………………………………………………………. 10
E. MERS interferes with Pennsylvania’s requirement that purported
assignees prove their relationship to the original lender in order to
foreclose……………………………………………………………. 12
F. MERS lacks legal authority and public accountability……………….. 12
G. MERS acts as a placeholder in the traditional recording system,
and cannot function without that system …………………………… 17
II. MERS helped precipitate the foreclosure crisis and left homeowners
without recourse to protect their property
rights……………………………… 18
A. MERS facilitated the securitization of subprime loans…………….. 18
B. MERS increased the costs of enforcing property rights and left
homeowners without recourse to challenge wrongful
foreclosures…………………………………………………………………………… 21
C. Surveys, audits and public media have exposed the inaccuracy of
records in the MERS database……………………………………… 22
D. Court proceedings and federal agency investigations have exposed
the inaccuracy of records in the MERS database………..…………. 24
E. MERS’s inaccuracy affects not only the properties for which it
is named as mortgagee, but all properties adjoining those
properties…………………………………………………………… 26
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