Admittedly, this act of rebellion against MERS, the electronic mortgage registry by a Pennsylvania county is comparatively minor, but nevertheless illustrates the efforts various local bodies are taking to assert their authority against a system imposed without regard to state and local real estate laws.
Montgomery County estimates that it has lost $15 million in recording fees due to MERS, which its Recorder of Deeds, Nancy Becker, says has also made a mess of title records. She is working to get the county to cease doing business with banks that make use of MERS, and has launched an effort to get other counties in the state to follow suit.
From the Times Herald (hat tip Lisa Epstein):
Montgomery County Recorder of Deeds Nancy Becker is urging registers of deeds across state and the country to withdraw public money from any banks affiliated with the Mortgage Electronic Registry System (MERS), which she claims is undermining the practice of accurate land recording.
In recent years, mortgages have been assigned and reassigned multiple times, and when a bank or other entity doesn’t properly report these transfers, it makes it very difficult for homeowners to determine who holds their mortgages.
“It clouds the chain of title, and it’s prohibiting (officials) from recording revenues they should be recording,” Becker said.
Since 2004, she estimates the county has lost $15 million in fees from 139,798 mortgages recorded via the electronic recording system that fails to reflect assignments. Becker said she fields calls about once a month from a homeowner seeking help finding proof a mortgage has been satisfied, so the person can sell their house.
“The problem is finding out where or with what firm a mortgage is assigned….It’s just sloppy, sloppy work,” she said.
The electronic system is referred to in many county mortgage documents this way: “MERS is a separate corporation that is acting as sole nominee for Lender and Lender’s successors and assigns. MERS is the mortgagee (lender) under this security instrument.”
“What I’d like to get out to new homebuyers is that, if they’re going to settlement and they see their bank slash MERS, to be cautious,” she said.
Since discovering the descrepancies, Becker has pulled the county funds out of Wells Fargo and transferred the money into Univest National Bank and Trust Company, a smaller local bank based in Souderton. The bank had been approached by MERS but decided not to partner with the cyber registry.
“They’re just a really good conservative bank,” the Recorder of Deeds said.
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Glad to see someone speaking up from the inside! I can’t believe all country recorders are not screaming about the lost funds because of this bank scam.
It’s good that lower-level governments are starting to see reasons, any reason, to Move Their Money to smaller banks. It’s too bad there’s still no groundswell for individuals and local/state governments to do this for the big reason of breaking Wall Street’s tyranny.
This is also yet another reason why every state should establish a state bank along the lines of North Dakota’s.
As for MERS, we need to compile every piece of testimony like this one as to how much it has enabled the banksters to steal from local governments. (And the theft is ongoing, as she says she needs to devote this much time and effort to untangling the messes MERS leaves behind. That’s not part of her job. Yet another unpaid externality. Yet another theft.)
And let’s smash the ridiculous argument that towns can’t recover lost revenue. Any town which is in financial difficulty, which means almost all of them, has every right to the claim that if it had been properly paid by the banks in the first place, it would now be in a better financial condition. This is obviously an injury. (As always, I make a political and moral argument and advocate action on those fronts, not an argument according to the banks’ rigged “laws”.)
Is the Montgomery County Recorder registering title for Vendors acquiring a property at a mortgagee sale from a Bank claiming the right to foreclose on a MERS registered transfer.
Seems to me that if the Registry has reason to doubt the validity of the title it should refuse to register it – which would be hard on the purchaser, true, but would bring real estate sales to a standstill instantly and force a resolution to the problem.
Alas, there are few mice that bark.
It may be that the banks have always been sloppy with recording assignments. That doesn’t justify ignoring the law If the banks don’t like the service they get in the crrent system, they should work to improve it, not set up an end run that ignores the law and fosters the destruction f the chain of title in many cases.
It is clear that local governments have suffered economic harm. And many other parties also. The clerks and recorders are fully justified in pursuing remedies to the fullest extent of law on behalf of the people. MERS was largely set up to enable the securitization process and we all know what that led to.
Yes, the banks “always have, and always will” seek to neglect the necessary and proper recording process. Thanks exactly why they should not be in charge of that process. However, they now have to eat their own cooking. Isn’t htat how capitalism should work?
The above was meant to reply to Old Trooper.
Lenders have always been sloppy about recording assignments and releases of mortgages. They were sloppy before MERS, they were sloppy during MERS and they will be sloppy after MERS. The simple fact is that assignments and releases don’t generate any revenue (though I’d wager that some lenders are now discovering the practical, legal reasons for getting assignments recorded). It’s not right, but those departments always have, and always will be, neglected.
As for the county clerks complaining about ‘lost revenues’ it is partially their fault that MERS was created in the first place. Many of them got MONTHS (I worked several courthouses that were over 6 months) behind in indexing real estate records. No one could tell for certain who owned anything, including mortgages. Hardly surprising that lenders came up with an alternate system.
Even if the couthouses were relatively current, this is like your plumber claiming he’s due a fee for your clogged toilett, even though you handled the problem yourself with a plunger. Government officials demanding fees for services they never provided – how typical.
By all means, make the lenders bear the costs of not recording assignments – but let’s not buy into the garbage these clerks and recorders are spewing. They are not ‘victims’ in all this.
Well you have made a wonderful case here about ‘sloppy’ lenders….you said it..sloppy..sloppy. When I was in the business we weren’t sloppy but the last few years certainly got real sloppy.
Regarding the creation of Mers due to sloppy lenders not recording docs..no, can’t agree to that one. Mers did tell the lenders how beneficial it would be for them to become a member and that they could save all of the recording fees but it was more about cost savings than not having their documents recorded in a timely fashion.
Further, I don’t know why the title companies gave their blessings to Mers, they certainly weren’t ‘looking ahead’ on that one. Now they can’t insure a clean title and that makes me laugh out loud.
In other counties, other states, it would seem the elected clerk could care less. Why would that be?
They’re still in shock at the (insert bodily orifice) violation by banker felons who are in cahoots with their elected officials. No one thought it possible in the USA so people aren’t responding rationally.
That’s what I thought at first too, but contact your county board of supervisors rep & educate him/her on the MERS scam (send a few good links) & see if you have better luck bringing it to their attention that way.
Old Trooper,
You are wrong. Every securitized mortgage was sold at least 3, usually more times. 3X title recording fees x every real estate transaction from 1999-2007. That’s billions nationwide. Thousands of new schools.
This was a concerted racketeering effort by the banks to avoid legitimate taxes. If you or I were to do the same, I’m sure Eric Holder would finally prosecute someone.
My county recorder is aware of MERS swindles and said they had filed suit against MERS in 2010. When I first contacted the recorder’s office, an unknowledgeable clerk told me that she thought everything MERS was doing was okay. I felt like I was in the twilight zone with that statement. I couldn’t get through to the elected offical via phone or e-mail. I then contacted my board of supervisors rep who cut through the red tape and he had the recorder assure me that he was well aware of the situation and had in fact filed suit. I urge everyone to contact their supervisor and alert him/her about the MERS scam. Its time to out the bankster trash & kick MERS to the curb for good!
I agree, those of us following this need to put pressure on the County recorders to look into this mess. I can only talk about my town but it is broke and I wonder how much revenue has been lost because of MERS.
Forgive me. Could someone point me to a laymans explanation of the securities issue with the mortgage bubble? I understand fairly well but cannot explain it properly, people shoot holes in my story and therefore it fails. I know that this was at the root of our ongoing collapse and would like to spread the news as wide as possible.
Many thanks in advance if you are able to help…
Larry