Bill aims to plug gaps in Utah property records

A bill before the Utah Legislature aims to fix holes in public property transaction records that were altered by mortgage bankers in the run-up of the real estate bubble and its subsequent burst.

The measure, proposed by Rep. Susan Duckworth, D-Magna, would require that any transaction affecting ownership interest in a property be recorded with counties within 10 days.

HB457 takes aim at the Mortgage Electronic Registration Systems Inc., a company created in the mid-’90s by the Mortgage Bankers Association to serve as a database to record the ownership of mortgage notes. The latter were resold a number of times before being packaged and marketed to investors. The bankers used their system to avoid fees to record changes in mortgage ownership, as had been done for hundreds of years.

MERS, in practice, replaced the traditional method of recording a change of ownership of a mortgage with a county recorder’s office. On most transactions, only MERS is listed as the mortgage note holder or agent of the holder at recorders’ offices. With the real estate meltdown that began in 2007 and the subsequent flood of foreclosures, the gap in public records has led to a legal challenges of foreclosures and questions about title ownership.

“What we’re trying to do is require entities to record with the county recorder’s office anytime the property or real estate is sold so we know who is actually holding it and where they are located,” Duckworth said Friday.

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Bill text below…

Bill Status
Last Action: 18 February 2011, House/ received bill with fiscal note from Print
Last Location: House Rules Committee
Bill Status

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4closureFraud.org

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H.B. 457 Recording of Transactions Affecting Real Property by County Recorder