I’ve written a couple of posts where MERS electronically kept track of notes rather than recording the title at the required county recorder offices throughout the U.S.  Now, it is not only becoming a problem but a headache for many states.

Real estate agents may also now be required to issue a disclosure to buyers when purchasing a short sale or foreclosure indicating there could be a “cloud” on the title in regards to not only first but also second mortgages.

I haven’t heard of it becoming a problem here in Oregon because we weren’t as involved in the sub-prime mortgage market as many other areas. However, it takes one person to test the validity of their foreclosure to bring the problem to the forefront.  We may still see a wave of issues here locally as well.  You can read more about it here.  There are many states that are having lots of problems because of the electronic tracking that MERS initiated.  I wonder who thought of that great idea??

Laws are written for a reason.  To determine chain of title, it has always been that a transfer of deed needed to be recorded along with the note, in the appropriate county.  Afterall, that’s what closing is – recording. 

Somewhere, someone got the idea to by-pass that law, make a lot of money and just keep track of the note rather than processing the required and necessary recording.  Now it’s coming back to haunt everyone from title companies, lenders, attorneys, courts, real estate agents and not to mention sellers and buyers.  Just one more chapter in this foreclosure crisis that everyone now is becoming aware of and we’re probably not through yet.

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