Massachusetts Home Seizures Threatened in Loan Case: Mortgages
Yves at Naked Capitalism comments on this Bloomberg article about the Eaton v. Federal National Mortgage Association case before the MA Supreme Court in the article Massachusetts Home Seizures Threatened in Loan Case: Mortgages:
This is super important … The highly respected Massachusetts Supreme Judicial Court is going to rule on whether the mortgage (the lien) can be separated from the note (the borrower IOU). Since the US Supreme Court over 100 years ago said the lien was a mere accessory to the mortgage, the odds are high they will say no. That means they might invalidate the foreclosure at issue, putting many other FCs under a cloud (but even if they rule for the borrower, I’d expect them to award damages rather than undo the FC; there is a lot of other law that treats sales out of bankruptcies and foreclosures as final). But a ruling in favor of the borrower would also deliver a fatal blow to MERS.
Killing off MERS would be a very good thing (although there might be some transition chaos).
Actually the concept underlying MERS of electronic registration is not a totally bad idea, it was the implementation that was terrible. If the transfer sent a notice to the deed register of the transfer as a part of the process (and paid the fee) using a service like Simplifile (which my county uses) then the need to go to the registrars office is eliminated. THe fee is like $16 for a one page document. Also MERS does have one other good idea that each mortage gets a unique identifier, So if the deed registrars were to be online, and include the ID then the need for which MERS was created would be fulfilled in a legal manner.
MERS may be a good idea in principle, but the banks were never empowered to overhaul state real-estate laws for their own purposes…
As a California resident, with its entirely archaic land registration system that sustains an entire industry of title searchers, title insurers at absurd rates, and so forth, I have considerable sympathy with the idea behind MERS, too. But as rjs points out, unilateral establishment of an extremely bank-friendly arrangment that runs roughshod over state land law (which is sovereign, as the Feds have no interest) was not really smart. In a nation in which endless legal boilerplate is required to hold practically everyone harmless for the most trivial transaction, I find it quite astonishing that the banks’ lawyers let them set up MERS in the form they did — and tend to think it was a coup, not a solution which they figured, if there was ever trouble, would be too difficult and expensive to get rid of.
Since clear possession of land is one of the oldest and most tradition-rich areas of the law — the oldest Western legal documents are basically all about title to land (in usufruct, usually, back in the those days, but also in allod), the way that MERS got set up is one more testimony to Americans’ lack of historical and legal-historical perspective. Landgrabs through perversion of the law have a way of getting folks rather upset, after all.
As a California resident, with its entirely archaic land registration system that sustains an entire industry of title searchers, title insurers at absurd rates, and so forth, I have considerable sympathy with the idea behind MERS, too. But as rjs points out, unilateral establishment of an extremely bank-friendly arrangment that runs roughshod over state land law (which is sovereign, as the Feds have no interest) was not really smart. In a nation in which endless legal boilerplate is required to hold practically everyone harmless for the most trivial transaction, I find it quite astonishing that the banks’ lawyers let them set up MERS in the form they did — and tend to think it was a coup, not a solution which they figured, if there was ever trouble, would be too difficult and expensive to get rid of.
Since clear possession of land is one of the oldest and most tradition-rich areas of the law — the oldest Western legal documents are basically all about title to land (in usufruct, usually, back in the those days, but also in allod), the way that MERS got set up is one more testimony to Americans’ lack of historical and legal-historical perspective. Landgrabs through perversion of the law have a way of getting folks rather upset, after all.
As a California resident, with its entirely archaic land registration system that sustains an entire industry of title searchers, title insurers at absurd rates, and so forth, I have considerable sympathy with the idea behind MERS, too. But as rjs points out, unilateral establishment of an extremely bank-friendly arrangment that runs roughshod over state land law (which is sovereign, as the Feds have no interest) was not really smart. In a nation in which endless legal boilerplate is required to hold practically everyone harmless for the most trivial transaction, I find it quite astonishing that the banks’ lawyers let them set up MERS in the form they did — and tend to think it was a coup, not a solution which they figured, if there was ever trouble, would be too difficult and expensive to get rid of.
Since clear possession of land is one of the oldest and most tradition-rich areas of the law — the oldest Western legal documents are basically all about title to land (in usufruct, usually, back in the those days, but also in allod), the way that MERS got set up is one more testimony to Americans’ lack of historical and legal-historical perspective. Landgrabs through perversion of the law have a way of getting folks rather upset, after all.