Foreclosure Mess Worsened by Loan Database

The foreclosure mess seems to get more entrenched everyday, but few troubled homeowners are aware of one hidden cause: the Mortgage Electronic Registration Systems, or MERS, an electronic loan database. Our sister site, DailyFinance, explains how this loan database is imperiling the nation's land-record system.

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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