MERS and the avoidance of mortgage recording fees is the next shoe to drop


MERS (Mortgage Electronic Registration System) and the avoidance of mortgage recording fees

Currently MERS is dealing with a storm in the foreclosure arena over whether or not a lender was legally able to foreclose on a mortgage in MERS name. This has led the firm to issue an announcement instructing all of its members to cease this practice immediately ("Is MERS attempting to put the genie back into the bottle with yesterdays announcement")

Remember that MERS was established for the purpose of creating an electronic system that was able to easily assign mortgages from one entity to another. This became critical in the age of securitizations when this paper would change hands quickly and often.

As part of this business model, members were able also to bypass the recording of mortgages in county clerks offices with a resulting savings of money by avoiding recording fees.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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