Heath's Blog


How do you know they own it?

I have recently been studying a growing problem across the US.  The problem is, "How do you know they own it?"  Here in Massachusetts, real estate documents are recorded in the Regisrty of Deeds for the appropriate county.  When you want to know who owns a property, you go to the registry and look up the address.  All the document related to that property can be found (it takes more time in some regirstires than in others.)

But recently there has ocurred a problem with who owns a mortgage.  In 1993 and entity called the Mortgage Electronic Registration Service (MERS) was started.  They cataloged their first loans in 1996, and  they have grown since then.  It appears that when a loan is taken by a MERS member, it is given a MERS number.  This allows tracking through their private system and they skirt any recording in the public registries of deeds.  The problems have arrisen when one of those mortgages need to be foreclosed on.  Who now "proves" ownership?  If the note has been assigned without regard to the public record, what record is reliable?

The public record is there for a reason.  Once again, as entites try to hide assets and skirt the existing system, they can't forsee all the problems they should have.  Like the trails left on tv for CSI investigators to find, we now need an MSI team - mortgage scene investigation. 

Heath Coker, Associate Broker
Robert Paul Properties
www.CapeGroup.com / capegroup@capegroup.com
508-274-5613  Licensed in MA
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That is a little scarey.  We don't have this issue in California.

Posted by Kim Sellers, Lake Arrowhead Realtor - BRE#01412099 - Lake Arrow (Lake Arrowhead, CA Coldwell Banker) over 12 years ago

Ditto with Kim's comment, I am confused as to the issue, we do not have that issue in CA

Posted by Jean Powers, CRS,e-PRO,HAFA,SFR Broker, Northern California (Kane & Associates call 510.908.9002) over 12 years ago

This does present a problem for sure.  I was not aware of this.  It will be interesting when all owners have not been notified and there is a foreclosure - I wonder if title insurance covers something like this.

Posted by Joan Whitebook, Consumer Focused Real Estate Services (BHG The Masiello Group) over 12 years ago

I think you do have it in CA.  MERS is nationwide.  You have escrow/title companies instead of registries, but the problems of proving ownership are at least very similar.

Posted by Associate Broker Falmouth MA Cape Cod Heath Coker, Heath Coker Robert Paul Properties Falmouth MA (http://www.CapeGroup.com & http://www.REindex.com) over 12 years ago

I am not aware of MERS , here in Illinois and yet I concur we do deal with title/escrow companies when preparing title and researching any liens. I, too am curious? Does this MERS entity carry any sort of insurance with its search and findings? Do you ALSO work with title companies? or just the MERS system.

So if there is a mechanics lien attached to the property, does the person attaching the lien go to your public records/courthouse? or through MERS? Seems confusing, and actually antiquated even for the year 1993. I realize you stated its an electronic system BUT if research must be done "manually" due to the lack of coordination with public records; its "sort of antiquated" and seems TO ME; open to all sorts of errors?

Curious? are you familiar with an abundance of errors with this system? or does it seem to work well enough in MA?

I find this very interesting; love to learn different systems in different states.



Posted by Patti A. Puckett (Broker Associate/Realtor/ISA with Nouveau Riche) over 12 years ago

MERS is national with 3000 member banks and up to 30,000 mortgages registered each day.  It has been taken to court in many states already.  Whether because of their avoidance of paying recording fees for assignments of mortgages, or whether they have the right to act for another corporation to complete a foreclosure, or whether they are hiding assets for members, or whether they should have a license as a lender; so far the public isn't really to informed about them.  But, in most mortgages today, the first page names MERS as the nominee for the lender.

Posted by Associate Broker Falmouth MA Cape Cod Heath Coker, Heath Coker Robert Paul Properties Falmouth MA (http://www.CapeGroup.com & http://www.REindex.com) over 12 years ago