Recording and MERS
One of the critical components of the securitization system in the United States market is the Mortgage Electronic Registration Systems (MERS) created in 1990s, which created a private system wherein underlying mortgages were assigned and re-assigned outside of the traditional recordation process done at the county level. The legitimacy and overall accuracy of this alternative recording system have faced serious challenges with the onset of the mortgage crisis: as the US courts flood with foreclosure cases, the inadequacies of the MERS model are being exposed, and both the local and federal governments have begun to take action through suits of their own and the refusal (in some jurisdictions) of the courts to recognize the legal authority of MERS assignments. The assignment of mortgage (deed of trust) and note (obligation to pay the debt) paperwork outside of the traditional US County courts (and without recordation fee payment) is subject to legal challenge. Legal inconsistencies in MERS originally looked trivial, but may reflect dysfunctionality within the entire US mortgage securitization industry.
Read more about this topic: Mortgage-backed Security
Famous quotes containing the word recording:
“Self-expression is not enough; experiment is not enough; the recording of special moments or cases is not enough. All of the arts have broken faith or lost connection with their origin and function. They have ceased to be concerned with the legitimate and permanent material of art.”
—Jane Heap (c. 1880–1964)