What is MERS and what is its role in foreclosures?

As probably the only attorney in Massachusetts that has specifically limited my practice to the defense of mortgage foreclosure over the past 7 years, I frequently encounter this very familiar question, “So what is this MERS who owned my mortgage, and now sold my mortgage to some bank or trust that is now seeking to foreclose on me?” A very tricky, and complicated, question indeed.

Once upon a time, all “lenders” (usually banks) granted loans (mortgages) to their customers, based (and limited to) a percentage on monies that this particular bank had on deposit. The “bank” also had a personal stake in the credit quality of the borrower as the bank’s money was at risk.

A key concept to remember is the fact that a “mortgage” actually consists of two completely separate instruments: 1.) the promissory note in which the borrower receives and signs a “note” (as the “maker”) in which he, she, it, promises to repay the amount of money loaned to the “payee”; and 2.) the Security Instrument (or mortgage) that states if the borrower fails to repay the note as promised (or breaches any other condition in the mortgage contract) paragraph 22 of the mortgage allows the “lender” to exercise the power of sale in the mortgage to sell the property to satisfy the outstanding indebtedness on the note. As mortgage foreclosure in Massachusetts is “non-judicial,” foreclosure operates completely extra-judicially, as a “creature of contract.”

Rest here…

Glenn Russell Jr. is Fall River attorney who specializes in foreclosure defense Community Voices is a weekly column featuring community-based experts or specialists.

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