DC Attorney General May have Just Banned MERS Mortgages

[patb]

http://voices.washingtonpost.com/political-economy/2010/10/dc_attorney_general.html

D.C. Attorney General Peter Nickles this week created an opening for potentially tens of thousands of homeowners to challenge their foreclosures. He issued an enforcement statement emphasizing that District law requires that the assignment of a mortgage from one party to another be recorded within 30 days of the transfer.

This is a problem because many of the country’s biggest mortgage companies list MERS, or the Mortgage Electronic Registration System, as the mortgage holder — rather than the actual owner of the mortgage — in local deed offices.
…..
Nickles explicitly stated that, in the District, the requirement for recording every transfer of mortgage “is not satisfied by private tracking of mortgage interests through the Mortgage Electronic Registration Systems.”

“A homeowner should not be misled into believing that a threatened foreclosure is supported by the District’s public records when it is not,” Nickles said in a statement, explaining that such practices are a violation of the jurisdiction’s consumer protection law.

Nickles said such violations may provide a “good basis for challenging the foreclosure in court” and encouraged homeowners and advocates to contact the attorney general’s office so that it “may consider bringing enforcement actions to stop foreclosure proceedings and seek restitution for consumers.”

If 60% of mortgages in DC were held by MERS and not
properly transferred, Expect the Banks to go
screaming to Congress to override DC law.

I wonder how many local jurisdictions have a similiar law.

[patb]

does anyone see this as important?

[patb]

does anyone see this as important?

[patb]

does anyone see this as important?

[patb]

does anyone see this as important?

[patb]

does anyone see this as important?

[SK in CV]

[quote=patb]does anyone see this as important?[/quote]

Potentially. But I find it hard to believe that the courts will simply allow the voiding of tens of thousands of mortgages. I think the decision to use MERS was made in good faith, though that certainly doesn’t make it a decision that is supported by law. It does kind of follow some other court decisions finding that MERS has a standing problem. It’s a mess. I am curious whether there are states with similar laws that will follow. It is important.

It wouldn’t, by the way, void the notes, only the security interests, converting the secured notes into unsecured notes. It would stop ordinary foreclosures and probably lead to more bankruptcies. I wonder what the DC homesteading laws are like.

[SK in CV]

[quote=patb]does anyone see this as important?[/quote]

Potentially. But I find it hard to believe that the courts will simply allow the voiding of tens of thousands of mortgages. I think the decision to use MERS was made in good faith, though that certainly doesn’t make it a decision that is supported by law. It does kind of follow some other court decisions finding that MERS has a standing problem. It’s a mess. I am curious whether there are states with similar laws that will follow. It is important.

It wouldn’t, by the way, void the notes, only the security interests, converting the secured notes into unsecured notes. It would stop ordinary foreclosures and probably lead to more bankruptcies. I wonder what the DC homesteading laws are like.

[SK in CV]

[quote=patb]does anyone see this as important?[/quote]

Potentially. But I find it hard to believe that the courts will simply allow the voiding of tens of thousands of mortgages. I think the decision to use MERS was made in good faith, though that certainly doesn’t make it a decision that is supported by law. It does kind of follow some other court decisions finding that MERS has a standing problem. It’s a mess. I am curious whether there are states with similar laws that will follow. It is important.

It wouldn’t, by the way, void the notes, only the security interests, converting the secured notes into unsecured notes. It would stop ordinary foreclosures and probably lead to more bankruptcies. I wonder what the DC homesteading laws are like.

[SK in CV]

[quote=patb]does anyone see this as important?[/quote]

Potentially. But I find it hard to believe that the courts will simply allow the voiding of tens of thousands of mortgages. I think the decision to use MERS was made in good faith, though that certainly doesn’t make it a decision that is supported by law. It does kind of follow some other court decisions finding that MERS has a standing problem. It’s a mess. I am curious whether there are states with similar laws that will follow. It is important.

It wouldn’t, by the way, void the notes, only the security interests, converting the secured notes into unsecured notes. It would stop ordinary foreclosures and probably lead to more bankruptcies. I wonder what the DC homesteading laws are like.

[SK in CV]

[quote=patb]does anyone see this as important?[/quote]

Potentially. But I find it hard to believe that the courts will simply allow the voiding of tens of thousands of mortgages. I think the decision to use MERS was made in good faith, though that certainly doesn’t make it a decision that is supported by law. It does kind of follow some other court decisions finding that MERS has a standing problem. It’s a mess. I am curious whether there are states with similar laws that will follow. It is important.

It wouldn’t, by the way, void the notes, only the security interests, converting the secured notes into unsecured notes. It would stop ordinary foreclosures and probably lead to more bankruptcies. I wonder what the DC homesteading laws are like.

[UCGal]

I’ve been thinking for a while that it would be counties (and districts) challenging the lack of recording (and therefore lack of fees collected) that would change MERS.

Local governments are broke. They want the transactions recorded and fees paid.

It doesn’t change the transactions – homedebtors still owe their mortgage, mortgages will still be owned, bundled, sold, traunched… but it will need to be recorded.

[UCGal]

I’ve been thinking for a while that it would be counties (and districts) challenging the lack of recording (and therefore lack of fees collected) that would change MERS.

Local governments are broke. They want the transactions recorded and fees paid.

It doesn’t change the transactions – homedebtors still owe their mortgage, mortgages will still be owned, bundled, sold, traunched… but it will need to be recorded.

[UCGal]

I’ve been thinking for a while that it would be counties (and districts) challenging the lack of recording (and therefore lack of fees collected) that would change MERS.

Local governments are broke. They want the transactions recorded and fees paid.

It doesn’t change the transactions – homedebtors still owe their mortgage, mortgages will still be owned, bundled, sold, traunched… but it will need to be recorded.

[UCGal]

I’ve been thinking for a while that it would be counties (and districts) challenging the lack of recording (and therefore lack of fees collected) that would change MERS.

Local governments are broke. They want the transactions recorded and fees paid.

It doesn’t change the transactions – homedebtors still owe their mortgage, mortgages will still be owned, bundled, sold, traunched… but it will need to be recorded.

[Author]

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