What is MERS? People who are facing foreclosure in Tennessee always want to know about MERS. People want to know if they see the word MERS on their deed if that will help stop foreclosure in Tennessee. MERS is short for the Mortgage Electronic Registration System. It has been defined by a Kansas Court as:
“A private corporation that administers the MERS System, a national electronic registry that tracks the transfer of ownership interests and servicing rights in mortgage loans Through the MERS system, MERS becomes the Mortgagee of record for participating members through assignment of the Member’s interests to MERS. MERS is listed as the grantee in the official records maintained at country register of deeds offices. The lenders retain the promissory notes, as well as the servicing rights to the mortgages. The lenders can then sell these interests to investors without having to record the transaction in the public record. MERS is compensated for its services through fees charged to participating members.” Landmark Nat. Bank v. Kesler, 216 P.3d 58, 164 (Kan. 2009)
What does that mean in english? MERS is a small corporation that is basically a database. The MERS database is used to keep track of mortgage transactions between banks. It can be used to trace how or when the banks sold mortgages to one another. It is unsettled in Tennessee as to whether this is a valid way to transfer property Although there hasn’t been any cases that have decided the issue, very likely that Tennessee is going to follow the trend and keep land conveyances the responsibility of the State and Local Officials. The state of the law nationally as to MERS has overwhelmingly decided that MERS, as a “nominee,” cannot assign promissory notes in which it never had any interest and thus also cannot assign mortgage instruments.
Given the widespread corruption that has gone on in recent years concerning Mortgages and Banks because of the lack of any oversight, it would make more sense that Tennessee would go with the majority of the Country and leave Tennessee Register of Deeds in Charge. If you see MERS on your property deed it doesn’t automatically mean that there is a problem with your mortgage but it is definately a red flag. The property laws in this country are well established and have proceedural safe guards that are meant to stop the fraud we are seeing recently with banks and their misuse of the MERS System in Tennessee. If you have any questions about your Deed of Trust, Note, Foreclosure or MERS shoot me an email or please call and i’ll be happy to discuss.
John Frank Higgins