Foreclosure Mess Worsened by Loan Database
On Dec. 2, the House Judiciary Committee held a hearing on the mortgage mess. Perhaps the most disturbing testimony was the written submission from Christopher Petersen, associate dean for academic affairs and law professor at the University of Utah.
Petersen detailed how the banks, Fannie Mae, Freddie Mac and Ginnie Mae destroyed America's land-record system, a method of tracking property sales that's existed since colonial times. Instead, they put in place a system called "MERS" (for Mortgage Electronic Registration Systems) that's legally shaky, makes tracking mortgage-note ownership extremely hard and may be clouding the title of millions of properties.
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But the MERS situation could be even worse than Petersen described to Congress: Millions of documents, including millions of foreclosure documents, may have been signed in MERS's name by people without the power to do so. A lack of authority would call into question the validity of all those documents. While the ramifications are uncertain, the bottom line is, as Petersen told me: "This issue injects yet another level of uncertainty into the already murky swamp of foreclosure nonsense."
At a minimum,the deposition of William Hultman, MERS corporate secretary and treasurer,and related documents that expose the issue reveal yet another example of the mortgage and foreclosure industry's carelessness with the rule of law.
See full article at DailyFinance.