MERS declared illegal. How will this impact the Foreclosure market, as well as current home sales?

Those who are reading this blog know that I have been discussing the mortgage mess that has been caused by the Mortgage Electronic Registration System (MERS). It was designed to circumvent existing legal recording requirements for transfer of deed and debt note information. Effectively, without MERS the entire Mortgage Securitization industry is out of business. And existing mortgages registered via MERS (over 1/2 half of all mortgages) are now legally suspect.

MERS Declared Illegal

The banking industry has been fighting tooth and nail to maintain the current MERS system, knowing that they are legally "on the hook" for all of those mortgage notes that were originated, sold, traded, and transferred. It anything was done improperly in the origination of these loans, they face massive "put backs" of Mortgage Backed Securities (MBS) on to their balance sheets.

The Mortgage crisis is not over, IMO. We might have just passed through the eye of the storm and are getting ready to be financially pummeled as we pass through the other side.

But in the meantime, this ruling is going to be appealed so that could take another year or so to be accepted, or rejected. There's a lot at stake riding on this ruling. It's going to become very political.

Scrutinizer

The Crux of the Foreclosure Debacle

Florida Foreclosure Report

Foreclosures take place against the Mortgage, not the note.

Read slide 90 especially where it states that the homeowner might face a secondary lawsuit by the actual noteholder

Scrutinizer