JPMorgan owned Mortgage Electronic Registrations System – Do you get a free house because the mortgage securitization industry didn’t want to pay county fees?

The October 19, 2010, NY Times Article of Floyd Norris ("HIgh & Low Finance) seeks to explain the controversy swirling around Mortgage Electronic Registrations System, the private company designed to "hold" your mortgage.

According to the University of Utah’s Christopher L. Peterson and Adam Levitin of Georgetown University, one cannot park a mortgage with MERS, but then transfer the note from investor to investor. United States District Court Judge Garr M. King of Oregon, ruled recently that the use of MERS had invalidated the mortgage, and that Bank of America could not foreclose. Mr. Peterson recites an 1879 Supreme Court decision reciting that "the assignment of the note carries the mortgage with it, while an assignment of the latter alone is a nullity."

Other explanations I have heard is that the mortgage investors did not want to pay a re-recording fee to the counties where the mortgages were based every time the mortgage loan obligation changed hands, so they sought to "park" the mortgages with MERS. This could prove to be penny wise and dollar foolish if Professors Peterson and Levitin are correct.


Most judges seem to be holding "No free houses in my Court."

We will see how this plays out.

If you are interested, here is the link to the October 19, 2010 NY Times article of Mr. Norris: