On Long Island, a federal bankruptcy judge ruled in February that MERS could no longer act as an “agent” for the owners of mortgage notes. He acknowledged that his decision could erode the foundation of the mortgage business. But this, Judge Robert E Grossman said, was not his fault. “This court does not accept the argument that because MERS may be involved with 50 percent of all residential mortgages in the country, ” he wrote, “that is reason enough for this court to turn a blind eye to the fact that this process does not comply with the law.”
If you haven’t heard of MERS, it stands for the Mortgage Electronic Registration System and it has all but replaced the nation’s public land ownership record. The problem is, the mortgages they have registered have no clear title and therefore MERS is being told they have no legal right to foreclose.