Flaws Cited in Foreclosure Review

Flaws Cited in Foreclosure Review By Alan Zibel - Wall Street Journal - April 3, 2013, at: http://online.wsj.com/article_email/SB100014241278873239163045784008829358200...

It would be interesting to know how many of the 'wrongfully' foreclosed borrower 'victims' were in judicial foreclosure states and how many such 'victims' were in states in which the mortgage / trust deed had a power-of-sale clause. And, in each case, it would be interesting to know what number of borrowers were actually in serious default when the foreclosure notice was served, and how many borrowers not in default were served with a notice of foreclosure.   

It seems one of the issues which has seriously complicated the foreclosure process arose out of the mis-management of note holder, mortgagee and land title records in the Mortgage Electronic Registration System (MERS). The Mortgage Electronic Registration System was conceived by Fannie Mae, and the development of the Mortgage Electronic Registration System was overseen and financed by Fannie Mae and Freddie Mac.

MERS is apparently seriously flawed. The system has few controls, a peculiar (or non-existent) managerial hierarchy, and MERS doesn't seem to be properly audited (or auditable).  

"Reston Based Company in the Middle of Foreclosure Chaos" by Brady Dennis & Ariana Cha - Washington Post 10/8/2010, at: http://www.washingtonpost.com/wp-dyn/content/article/2010/10/07/AR2010100702742.html

"Two Faces: Demystifying the Mortgage Electronic Registration System's Land Title Theory" By Christopher L. Peterson - SSRN, at: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1684729


A Mortgage Tornado Warning, Unheeded

BUSINESS DAY | February 05, 2012
A Mortgage Tornado Warning, Unheeded
Inspired by a personal experience, a businessman began delving into the practices of the mortgage industry, including Fannie Mae. His findings have been prescient.
Ms. Morgenson:

Regarding MERS, a few months ago I read that MERS was actually conceived by Fannie Mae and the concept was described in a presentation given at a Mortgage Bankers Association convention in 1993 or 1994. The article claimed Fannie got positive feedback on the MERS concept from the mortgage bankers. The article claimed that Fannie Mae and Freddie Mac then funded the development of MERS with contributions of 2 million dollars each. After MERS was 'brought live' Fannie and Freddie invited large mortgage industry members to join MERS on a subscription basis.

I've searched again for the article(s) recently, but I haven't been able to find the articles that described the actual creation of MERS. Perhaps the articles have been "scrubbed".

What I read seems to confirm the leadership role that Fannie and Freddie had, and the ways these two GSE's influenced and led the industry, and how they shaped practices in the industry. You might find the two articles referenced below interesting:

Is FM Watch a Crusader With an Agenda? By Louis Sichelman – RealtyTimes, pub. 7/5/1999 at: http://realtytimes.com/rtpages/19990705_fmwatch.htm

New Alliance Confronts FM Watch, Champions Existing Housing Finance System By Broderick Perkins RealtyTimes, pub. 10/5/2000>  http://realtytimes.com/rtpages/20001005_fmwatch.htm