Essay | MERS is Dead: Long Live MERS

MERS is Dead: Long Live MERS

Mortgage Electronic Registration Systems, Inc. (MERS) has generated substantial controversy and academic analysis about its ubiquitous appearance in countless mortgage foreclosure actions. As the ostensible mortgagee under millions of borrowers’ home loans, MERS’s unique relationship with lenders, servicers, and homeowners has resulted in widely disparate judicial treatment across the nation.

Although a seemingly large majority of jurisdictions agree with MERS’s various arguments for its standing to foreclose and assign mortgages, courts in three states have recently shown that MERS remains vulnerable to attack. This Essay examines these recent anti-MERS decisions in the context of the ongoing debate about MERS’s standing, while highlighting the novel approaches taken by the courts in question.

The Article concludes that these cases reveal that MERS remains vulnerable to a single judicial opinion affecting MERS’s arguments (and, therefore, lenders’ and servicers’ foreclosure processes) throughout any given state. However, the Essay concludes that the fact that these opinions were deemed newsworthy at all indicates that MERS’s role in mortgage foreclosure litigation is unlikely to be halted or significantly hindered on a national scale.

Copy of essay below…



MERS is Dead: Long Live MERS

7 Responses to “Essay | MERS is Dead: Long Live MERS”
  1. Charles says:

    MERS Accused Of Secretly Selling Consumer Info
    Printable Version Share Article Rights/Reprints Editorial Contacts


    Case Information
    Case Title

    Sciortino v. Merscorp Holding, Inc.

    Georgia Northern
    Nature of Suit

    480(Consumer Credit)
    Case Number


    Judge Amy Totenberg
    Date Filed

    July 12, 2012

    Class Action
    Privacy & Consumer Protection
    Real Estate


    Equifax Inc.

    Share us on: Twitter Facebook LinkedIn By Lana Birbrair
    Law360, New York (July 16, 2012, 8:39 PM ET) — A putative class of consumers hit a Mortgage Electronic Registration Systems Inc. unit with a suit Friday in Georgia alleging the company, which creates consumer reports and maintains files on 63 million people, secretly collects and sells confidential information on residential mortgage applicants.

    The putative class action alleges that the information collected by Merscorp Holdings Inc. is included in the consumer reports it sells, which contain confidential identifying information such as Social Security numbers and dates of birth.

    The suit alleges that Merscorp uploads mortgage application information to the Merscorp database when mortgages are applied for with a member of national fraud prevention database Fraud Alert, regardless of whether the applications are approved and without informing consumers.

    The putative class, led by consumer Ronald Sciortino on behalf of more than 1,000 individuals, accuses Merscorp of refusing to comply with the Fair Credit Reporting Act by then selling that secretly recorded information without hiding an applicant’s Social Security number, date of birth, home address, occupation and other identifying information.

    “Unlike Equifax, TranUnion [sic] and Experian, MERS does not have a policy in place to prevent the disclose of consumers reports of high-profile individuals; indeed, very few people outside the mortgage industry even know of the existence of the secret database, thereby making it ripe for exploitation for nefarious and other illegal reasons such as identity theft,” the suit said.

    For a fee, any person or company can access all the information in the Fraud Alert database on any consumer, according to the complaint. As a matter of company policy, however, Merscorp will not disclose the contents of a person’s file to the consumer in question, nor will it disclose to the consumer the names of anyone who has requested his or her file, the suit says.

    The suit alleges violations of the FCRA and seeks class certification and actual, statutory and punitive damages, plus attorneys’ fees and costs. The suit also seeks an order forcing Merscorp to produce class members’ entire consumer reports, the sources of the information contained in the reports, and the identity of each person that procured a consumer report for employment or any other purposes.

    Representatives for the parties were not immediately available to comment Monday.

    The plaintiffs are represented by Stephen Minsk of Minsk & Associates LLC.

    Counsel information for Merscorp was not immediately available.

    The case is Sciortino v. Merscorp Holding Inc., case number 1:12-cv-02446, in the U.S. District Court for the Northern District of Georgia.

    –Editing by Kat Laskowski.

  2. A MERS mortgage granting them “legal title” is covered under UCC Article 7. Once a “document of title” is converted to an electronic record, the tangible document becomes void. It cannot be transferred via endorsement, since it is no longer valid. MERS can never “deactivate” the electronic record of an active mortgage, as this extinguishes the entire record. This point needs to be driven into the brains of the judiciary.

  3. John Anderson says:

    Only when a aroused and informed public takes control of a government now controled by the banks, will prosperty return to America.

  4. Sarah says:

    MERS has been found to be illegal, but MERS usually doesn’t matter when they take your house, generally speaking. Sometimes, and maybe in some states, it does, but not everyone is going to be able to put up a fuss when they are beaten into the ground. I enjoy the way the media suddenly rediscovers MERS from time to time. Controversy? What controversy? MERS was and is the foreclosure express.
    Before we know it, the housing crisis, the financial crisis will be re-written as a non-event. Just like LIBOR, the hacks (academic and otherwise) were quick to lie about a “victimless” crime. Who says the MSM isn’t an intergral part of the police state, the MSM? Next stop – East Germany!

  5. 1ofthemany says:

    Nize Nazi info there and thanks for yet another heads up on the continued unlawful acts by the unlawful entities, bu$ine$$ as usual, by hook or crook. $O$ and most importantly!!!! SOS!!!!

  6. Victoriaann says:

    Tell me this, how is MERS still foreclosing on peoples houses? It is listed every week in the newspapers that MERS is the foreclosing entity. Whats the cover-up?

Leave a Reply