A recent story from Bloomberg reports on MERS and Mortagegate

A definitive ruling against MERS might slow any future bundling of mortgages into securities since the company played a role in that process…

…“MERS is the central device by which the banks have tried to opt out of the legal system and the real-property record system,” U.S. Representative Alan Grayson of Florida said in an interview. “They have taken it upon themselves, with the supposed consent of the borrowers, to violate a system of property record-keeping that we’ve had going back centuries.”…

…The company’s tagline is “Process Loans, Not Paperwork.”…

…Under the MERS system, a borrower who takes out a loan agrees to allow the company to act as the lender’s nominee, or agent, on the mortgage or deed of trust securing the property. That means MERS holds the lien, according to the company…

…“The problem with MERS is it takes a public function and puts it into a private entity that doesn’t seem to have any clear accountability,” said Alan White, a law professor at Valparaiso University in Indiana…

…MERS played a key role in the bundling of mortgages into securities that reached a frenzy before the economic decline of 2008, critics including Grayson of Florida said. It allowed banks to sell and resell home loans faster, easier and cheaper, he said….

…“MERS was a facilitator of securitization…

…A big selling point for the company is its cost savings. It charges $6.95 for every loan registered, Lejarde said. With an average cost of about $40 for filing a mortgage assignment with local counties, MERS has saved the industry about $2.4 billion…

…courts have expressed confusion that MERS positions itself as both mortgage owner and representative of a mortgage owner…“It is axiomatic the same entity cannot simultaneously be both an agent and a principal with respect to the same property right,” Christopher Peterson, a law professor at the University of Utah…

…MERS has no standing in proceedings to seize delinquent borrowers’ homes…

…bankruptcy attorneys who criticize MERS say it has no right to foreclose when it doesn’t hold both the promissory note and the security instrument — the mortgage or trust deed. The U.S. Supreme Court ruled in 1872 that a mortgage has no separate existence from the note, Peterson wrote…

…supreme courts in Arkansas, Kansas and Maine have found that MERS had no standing in foreclosure proceedings under their states’ laws…

…MERS has also come under fire for allowing members to appoint their employees as MERS certifying officers — as assistant secretaries or vice presidents of MERS — to sign documents, including assignments. MERS has deputized “thousands” of such certifying officers,…

…MERS and its members have been sued this year for racketeering in New York, Florida and Kentucky federal courts, accused of conspiring to falsely foreclose on loans and “to undermine and eventually eviscerate long-standing principles of real-property law.”…