Law Review: Weber- The Magic of the Mortgage Electronic Registration System: It Is and It Isn't

Abstract:      This essay critically examines MERS' structure which incorporates principles of dubious legality such as a theory of common agency as well as a duality of roles held by MERS. The article examines many recent decisions in state, federal and bankruptcy courts in order to identify current trends regarding MERS-related jurisprudence. The essay also provides an in-depth discussion of the historical issue of severing a promissory note and a mortgage, and how that can prove to be fatal in some cases but not others (depending especially on the forum). The article concludes with a proposal for the creation of a federal data clearinghouse akin to the EDGAR system for publicly held companies, to document ownership and transfers of mortgages and promissory notes in a secondary market. Comments: The  interesting aspect of this article is not its survey of cases, but instead that it foregoes any discussion of redress for the malfeasance by MERS and  mortgage servicers and rather proposes a solution for the problems that MERS was designed, but fails, to adequately resolve. The creation of a federal electronic clearinghouse, patterned on the SEC’s EDGAR database,  would meet many of the goals of the mortgage industry, viz. allowing efficient transfer and assignment of notes without the costs of recording each such transfer locally (which consist of not only, while requiring the public transparency, including a complete "genealogical record of the promissory note and security instrument",  that  is completely lacking under the current system of MERS.   For a copy of the article, please see: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1898306