When you are served with a foreclosure, you need to understand some of the terminology that is associated with foreclosure defense. As part of an ongoing blog series, we are going to review some of the important terms that you need to become familiar with and how they work, so you can be well educated as you go through the foreclosure defense process with your attorney. So we will start the series with: What is MERS?
MERS or the Mortgage Electronic Registration System is an electronic registry used to track ownership and servicing rights of mortgage loans. When the housing market picked up in the 1990′s, the old Assignment of Mortgage paper trail that was used was deemed too slow and a new process needed to be created to speed up the process as the United States moved into the electronic era. So in April of 1997 the MERS system was launched.
Banks utilized the MERS system to not only speed up the process of the buying and selling of mortgage loans, but by using this system they saved billions of dollars in filing fees. If a loan is paid back on time, the MERS system is only required to have two documents recorded, the original deed of trust or mortgage and the reconveyance of the deed of trust or mortgage when the loan is paid off.
The MERS system is beneficial to home owners, real estate professionals, and title companies as the system allows them to be able to identify who the current holder of the mortgage is. The Mortgage Identification Number or MIN for short, can be used to track the history of the loan throughout the entire process, including securitization and foreclosure. The MERS ServicerID allows homeowners to search for who the current owner of the mortgage is, just in case they need to refinance their loan or initiate discussions with the loan holder to prevent foreclosure on their home.
The information in the MERS system is also used to identify mortgage fraud in foreclosure defense cases. Since a lot of mortgages were added to the MERS system without the original mortgage note and in many cases sold without verifying that the sale was based on the original note, a high number of foreclosures that were filed were not legal. This type of mortgage fraud has been identified in many foreclosure defense cases and homeowners have been successful in keeping their property based on this type of mortgage fraud.
When hiring an attorney for your foreclosure defense, the attorney will utilize this system to identify who the current mortgage owner is and identify if fraud is involved with the mortgage loan. If fraud is detected this will strengthen your case against the bank and assist you in saving your home.