Could Recent Mortgage Law Challenges Mean More Homeowners Won’t Face Foreclosure and/or That They Were Illegally Foreclosed On and Can Keep Their Homes?

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In this past Tuesday’s post here, we discussed the organization known as MERs, which has filed to foreclose on thousands of homeowners across the country, and now courts are challenging their ability to do so.  

If you’ve never heard of MERs, don’t worry, you’re not alone. Most homeowners haven’t – that is, unless and/or until they face foreclosure.  To recap, MERs  is . . . 

the Mortgage Electronic Registry Systems . . .  This company, owned by the major banks, was set up in the mid-1990s by the Mortgage Bankers Association, Fannie Mae and Freddie Mac. Its goal was to expedite the home loan process. . . .

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Why It’s Important For Homeowners Facing Foreclosure to Know What MERs Is

In short, because now courts are challenging their ability to foreclose at all on a homeowner. Why? Because they don’t own an underlying interest in the property. 

Only a party with an “interest” in a property can file to have it foreclosed on (eg, a bank/lender, a contractor who has a lien against it, a homeowners association (HOA) when a home owner doesn’t pay their dues, etc.).

MERs’ position, by its own admission, was only to “keep track of changes in servicers and mortgage ownership . . . Foreclosure really was not central to [its] core business and the organization never received income from foreclosures.” 

So, what does all of this mean for the Average Joe homeowner?

Main that your home may have been illegally foreclosed on because the organization “helped make possible foreclosures that otherwise might not have taken place because the necessary original documents were missing,” according to the Reuters article, Exclusive: Facing criticism, MERS cuts role in foreclosures. 

What Should You Do If You’re a Homeowner Who’s Received a Foreclosure Notice from MERs

There are so many intangibles that it’s hard to lay out a specific course of action for every homeowner. Many lenders have their own programs where they’re trying to work with borrowers – so some are being proactive on their own.

But, if you suspect that your home was illegally foreclosed on and you can’t get any cooperation from your lender, it might be time to consult a foreclosure attorney to at least discuss your options – that is, if you even want to keep your home.

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Copyright © 2011 Yuwanda Black for Foreclosure Business News. Article may not be reprinted or reproduced in any manner without the express, written consent of the author.

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