MERS (Mortgage Electronic Registration System) is a national electronic registrations system, owned and operated by MERSCORP, used to rack the ownership and servicing rights associated with mortgage loans. MERSCORP is registered in Delaware but headquartered in the Virginia suburbs of Washington, DC. The MERSCORP website states, "MERS is an innovative process that simplifies mortgage ownership and servicing rights are originated, sold and tracked. Created by the real estate finance industry, MERS eliminates the need to prepare and record assignments when trading residential and commercial mortgage loans."
The MERS system was created by members of the mortgage finance industry in 1996 in an effort to lower the costs associated with executing and recording mortgage loan documents with municipal recording offices. In order to use the MERS recording system members must pay a membership fee and agree to abide by the MERS terms of use. In its first few years MERS was only able to attract very large lenders Fannie Mae and Freddie Mac to use the system but in 1999 smaller, private mortgage lenders began using the MERS system.
While this may sound like a harmless way for mortgage finance companies to lower their fees and costs, MERS has created many problems which the mortgage industry is just now beginning to understand. In traditional land sale recording, when an individual buys land and enters into a mortgage contract the lender records that contract and their interest in the land in a county recording office. Any additional transfer of the mortgage is recorded again in the county recording office. What the MERS systems does is make the initial recording of the property and mortgage in the name of MERS as the "mortgagee of record." Any additional transfer of the mortgage is now done within the MERS system and is not recorded in the county recording office. This new policy has clouded the title of many homes and left homeowners facing foreclosure without a clear picture of who actually owns the mortgage on their home.
If you are facing a Florida Foreclosure Lawsuit where MERS or a company you are not familiar with is the Plaintiff contact a Jacksonville Foreclosure Defense Lawyer to discuss your circumstances and possible options to save your home.
