What is MERS?
Over the past several months, there have been a number of interesting foreclosure-related developments in Oregon. In March 2011 the sale of hundreds of foreclosed homes in Oregon were halted when federal judges questioned the legality of foreclosures through MERS (the Mortgage Electronic Registration System). MERS was a system that was created in order to ease the securitization and sale of mortgages. The system is controversial because it allowed lenders to sidestep the traditional way of transferring properties by recording all transfers in local registries.
Several court rulings have come down since then that have been devastating to lobbyists efforts to change Oregon laws in a way that would allow servicers to sidestep recording requirements. To date these efforts have been met with intense public backlash.
Know Your Rights
Most recently a Columbia County judge blocked US bank from evicting a Vernonia woman who home was purchased in foreclosure. The implications of this ruling calls into question the validity of many recent foreclosures that involved MERS and may cause lenders to again halt foreclosures involving MERS and force them to pursue other means of liquidating the properties. Since MERS by there own estimate own 60% of the trust deeds out there, we are talking about a lot of homes that are going to be left in limbo.
Short sales are one of the most obvious outlets for these lenders moving forward. As a Realtor® in Central Oregon that does a large volume of short sales, I am already seeing the servicers I work with becoming more proactive. We are seeing lenders making contact with home owners and recommending that they pursue a short sale. Although short sales are still complicated and time consuming, it appears that we will be seeing more lender participation and cooperation in the months to come.