Mortgage Fraud: MERS on very shaky legal ground

This is the best explanation I've yet heard regarding the controversy over the legitimacy of MERS and the ENTIRE mortgage securitization process. In sum, the mortgage banks wanted to circumvent paying the recording fees to each individual county where titles and deeds recording who actually owns a piece of property were maintained. MERS attempted to replace that structure, without legal authority. A tidbit that should make it worth your reading the remainder of the link:

Because the new system cut out payment of county recording fees it was significantly cheaper for intermediary mortgage companies and the investment banks that packaged mortgage securities. Acting on the impulse to maximize profits by avoiding payment of fees to county governments much of the national residential mortgage market shifted to the new proxy recording system in only a few years. Now about 60% of the nation’s residential mortgages are recorded in the name of MERS, Inc. rather than the bank, trust, or company that actually has a meaningful economic interest in the repayment of the debt.15 For the first time in the nation’s history, there is no longer an authoritative, public record of who owns land in each county.

MERS illegality explained

As the reader can see, the case is very compelling that 60% of the existing mortgages may have been fraudulently originated and then illegally conveyed into the securitization process.

And here's another good article on the problem:

Primer on Foreclosure Crisis

And I have to agree with Denininger in that only an RTC style program is going to resolve this. Waiting to undertake this process is only delaying the inevitable pain. And that pain will only grow more intense as more and more legal findings are brought forth.

EDIT: Oct 12, 2010

And one of the few credible reporters for CNBC, Diana Olick, is even hopping on the bandwagon..

Foreclosure Fraud: It's Worse Than You Think

However, I have to ask why it's taken the "News" Media over a year to finally cover this issue? Why is it newsworthy NOW, but not back in 2008, or even earlier??

This isn't new stuff.. Denininger has been covering this issue for well over a year.

And the Monolines have been suing Wall St. banks over their fraudulent originations for over a year.. But NOW it's "news"??

EDIT: Oct 13th JP Morgan (JPM) stops using MERS mortgage registration system:

JPM admits "OOPSIE DAISY"!!

And more amplification on exactly what MERS is (and what it isn't) from Washington's Blog:

MERS role in foreclosure mess

Again, it's amazing the amount of political momentum that is gathering over this issue despite the fact that it's been a well-known fact that has been discussed for well over a year.

Scrutinizer