Faulty Foreclosure Docs? Feds Investigate

Federal regulators are probing possible problems in a private company's electronic processing of foreclosure documents.

They are looking into the methods of the Mortgage Electronic Registration System, which tracks mortgage loan ownership and servicing rights. MERS is being investigated by the Office of the Comptroller of the Currency after some consumer attorneys and other groups criticized the electronic loan registry's legal standing.

MERS argues that its service streamlines the process of filing mortgages in county land records, thus saving money for both lenders and consumers.

But critics say that the privately held company, whose data has played a key role in many foreclosure cases, does not have the capability it claims and has allegedly introduced defects into the foreclosure process.