Let me see if I get this: all that genius securitization of mortgages had one bank selling notes to another. Over and over again. This entity called MERS (Mortgage Electronic Registration System) was created — JP Morgan is a part-owner — to smooth over the process. But the legal world from D.C. to Utah to Oregon is nipping away and now saying that this MERS entity may not constitute legal ownership of a mortgage. It’s like a shell company. According to this article in the New York Times, 60 percent of the mortgages in the U.S. are “owned” by MERS. But… some judges are saying that MERS is an agent, and cannot list itself as the owner of a mortgage.
“But since it does not own the actual loan, doing that (recording mortgages in its own name) could be seen as violating a long line of precedents that bar separating a mortgage from the underlying note in which the borrower promises to pay. He quotes from an 1879 Supreme Court decision holding that “the assignment of the note carries the mortgage with it, while an assignment of the latter alone is a nullity.”
It would be interesting to write our lenders and ask them to produce the notes they hold on our mortgages, and see what happens.
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