MERS - Mortgage Electronic Registry System
MERS which is an abbreviation for Mortgage Electronic Registration System has been the ultimate authority and primary database of mortgage security registration and is where the records for proof of ownership has been kept since 1997.
MERS was created to make it easier, and less costly to trade mortgage backed securities.
It has worked wonderfully until now. The authority or MERS is now up in the air. The problem is that the actual paper work can be hard to track down and many homeowners have challenged lenders on the proof of mortgage security ownership. The big question looming is whether or not the authority of MERS will ultimately stand.
There is talk about actual transactions being rescinded because of this controversy.
Now I am all for homeowners catching a break. Trust me I think what needs to happen is to hike interest rates up but slash the principle of these mortgages via loan modification. When I say reduce principle I am not talking one or two points. I think we need to be slashing 20 - 35 percent off of these troubled securities.
But back to my point if it comes to unwinding transactions that have already been processed then we are gonna have a problem. Everyone is going to have a problem. Who knows what the ultimate fate of the United States as a Nation would be if any sort of activity like that would take place.
On a brighter side of this whole things many big lenders have halted foreclosure proceedings in 23 states so that they can figure this whole thing out. I think this could be exactly what the US needs to start over. Just think about it. lenders are going to be a lot more willing to work with homeowners in financial hardship if foreclosure is a 3 - 5 year uncertainty.
Homeowners would be able to obtain mortgage solutions that work. Loan modifications would have to cut principle and interest rates to levels that are feasible. There is no doubt about that. What other choice would lenders have. They would be faced with one of two options. They can either work with the homeowner to find a solution that creates a sustainable mortgage payment for the homeowner, or they can try and wait out a storm of uncertainty and zero cash flow not to mention increased costs.
Either way the homeowner wins because they are able to stay in their home which will be rent free. Imagine how much money a family could save over a two or three year period. By the time they were evicted they would have enough for a down payment on another home. That would be a great way for many folks to get their personal finance issues resolved
I am really crossing my fingers that we don't take this too far. I think everyone is pissed off at lenders but lets not forget where we all keep our money. If Bank of America goes you can rest assured that the country that you know and love will go with it.
On a whim I wanted to add one other thought.
There is a nonprofit group known as NACA which was started in the late 1980's by a guy named Bruce Marks. He has been fighting for homeowners and the American consumer for decades and he fights dirty.
Trust me every homeowner should thank what ever forces that you may believe in that this guy is on their side. When it comes to protecting homeowners this guy throws every rule out the window and will do his best to ruin anyone or anything that stands in his way.
I am writing about him here because I think he is a great candidate to act as a leader in whatever solution comes of this mess. He cares about homeowners but at the same time he understands how the economy works and what needs to happen to preserve the Nation that we all call home.
This is opposed to many advocacy group leaders and politicians who may want to stand up for homeowners no matter what the cost to lenders. then their is the other extreme of those who can be bought or purchased by the banks one way or another. Which in all honesty, big banking dollars can buy almost everyone. seriously this is not a notion to take lightly. A billion or so dollars will make a man or woman do unspeakable things.
So I just wanted to throw Bruce Marks and the NACA a line. If you are not familiar with that organization then I suggest that you check it out.
They help homeowners who are in need of debt help. It cost money but nothing is free despite what you may hear in the media. I am really getting sick of this notion that debt help should be free. Where do you think money for organizations such as HOPE NOW or the like come from? Straight from the lenders.
I really wish one of the major news and media organizations would take some time and expose the mess that regulatory and political actions have made. These parties involved have destroyed any chance of an affordable debt help service option with incentives inline with the consumers best interests.
I have mentioned this idea in a prior post about the FTC debt settlement laws and nonprofit debt management groups. I encourage you to check it out.