The Mortgage Electronic Registration System (MERS) has won another round in court. This time it was the Supreme Court of Nevada that unanimously held in favor of MERS’ legal standing to foreclose on behalf of its member banks.
Nevada has been riddled with foreclosures ever since the housing crisis began. In fact, RealtyTrac statistics show that Nevada held the distinction of having the highest state foreclosure rate in the country for 64 months in all between November 2006 and April 2012. It also had the highest state foreclosure rate for the first half of 2012.
The Silver State’s economy is keenly dependent on tourism and the casino industry. Once controlled by crime syndicates back in the early days of the gambling boom, the major casinos are all owned by very large corporate entities now.
And who are the members of MERS? The banks…aka very large corporations (Bank of America, Wells Fargo Bank, JPMorgan Chase, Citigroup, etc). The very same banks that are trying to get the wheels of their foreclosure machinery back in gear as fast as possible after they got into hot water with the whole robo-signing episode. And they are the same large corporations who eagerly took the federal government’s TARP money to shore up their reserves and then paid back every penny as quickly as possible.
In a story reported by the Las Vegas Review-Journal yesterday, the president of the Nevada Bankers Association said this decision validates the whole concept behind why MERS was created in the first place. “The whole thought behind it was bringing loan recording into the 21st century,” said William Uffelman.
Critics disagree, arguing that MERS is an end-around play to avoid paying local recording fees every time a note changes hands, thereby saving the lenders a lot of money.
Representing homeowner David Edelstein in the case of Edelstein v. Bank of New York Mellon, attorney Jacob Hafter told the Review-Journal after the decision was handed down, “…the court has cleared a path to begin foreclosing in a mass effort.”
Whether MERS has legal standing to sue has been such a political volleyball from state to state for the past couple of years. Do you think that a company like MERS — that represents a coalition of major corporations in a particular industry — should be allowed to exist? Or should the banks be required to process their own foreclosures and pay the price of admission?
Here’s some other stories of interest from the RealtyTrac newsroom:
The 2012 Election Will Come Down to Who Wins the Magnificent 7
Mansions & Foreclosures in Wealthy ZIP Codes
7 Expert Tips for Buying Foreclosure Rentals