I’m no soothsayer, but one thing you can be reasonably sure of is that the foreclosure crisis will continue to reveal itself in 2011 (holy smokes! 2011???). The Washington Post has an article about one of the “villains” in this story: Mortgage Electronic Registration Systems (“MERS”). MERS is a system which was supposed to make it easier keep track of the transfers of deeds, especially during the age of the securitization of mortgages.
From its detractors’ perspective, MERS, “tried to turn the mortgage business into … a production line, but in reality you’re dealing with humans, you’re not building cars or widgets.”
The question for me is will the courts be willing to invalidate all of the mortgages which have come under MERS’ purview? Unless I misunderstand the whole thing, that would mean that hundreds of thousands of homeowners would get their homes free and clear of any lien. That’s probably too simplistic a view, of course. The lenders would still be able to go after borrowers for any default, but without the security of the property, what exactly would the lenders get from these borrowers who are hundreds of thousands of dollars in debt?
Stay tuned for more developments in the new year.
You can read the story here.