And exactly where are the cost savings when it’s probably costing them a ton more defending MERS??
By: David Dayen Thursday January 20, 2011 7:15 am
Laurence Platt, a partner at the firm K&L Gates, which defended Wells Fargo and US Bank in the Ibanez case, basically threatened the American homeowner with sky-high interest rates if the banks aren’t allowed to run their own private land recording system.
If local governments succeed in the fight against how banks have recorded the transfer of mortgage notes through the Mortgage Electronic Registration Systems, home loans could become as expensive as credit cards, K&L Gates Partner Laurence Platt said Wednesday […]
Platt admitted there were issues with the system, but he warned that scoring short-term political points could be the end of affordable housing.
“They are making secured credit unenforceable,” Platt said. “If you think you’re going to get 4% mortgages on unsecured loans, you’re wrong. You’re going to get credit card rates. MERS was designed to make it easy to transfer assignments in modern economics.”
This occurred on a panel at a meeting of the Mortgage Bankers Association, where Platt appeared with Georgetown Law Professor Adam Levitin, who has been critical of MERS. I corresponded with Levitin, and this was an accurate rendering of Platt’s remarks.
“My response was that’s nonsense,” Levitin wrote in an email. “No one, absolutely no one, is arguing that a valid security agreement should not be enforced. Instead, the issue is whether we should enforce invalid security interests or let parties that do not hold a security interest enforce someone else’s. I hardly think that denying parties that right will result in a change in the cost of credit. It might result in them changing law firms, however, to ones that didn’t screw up their securitization deals.”