- give lenders across the country instant access to real-time mortgage information,
- diminish potential for fraud, and
- lower costs for servicers and borrowers.
These planned achievements were echoed by the Mortgage Banking Association, which was tasked with overseeing the project.
But this kind of talk was just for the press release
As it turns out, the banking industry wasn't really concerned with efficiency or transparency or the greater good. It was all about their making money, as quickly and efficiently as possible. In actuality, MERS was created to help the industry push its latest money-maker: mortgage-backed securities, a Wall Street financial scam that dressed up the most toxic, guaranteed-to-fail loans as Grade-A investment vehicles that could be sold to suckers looking for easy gain.
However, before mortgage-backed securities could be unleashed on the residential housing market, on a massive scale, bankers needed to get rid of America's long-standing real estate recording laws, which required lenders to file all mortgage transactions--the origination of a new loan, for instance, or the transfer or sale of a mortgage between banks--with the county in which the property is located. While this recording requirement was not a problem in the sleepy pre-securitization days of the home loan business when mortgage transactions were kept to a minimum, it was going to be much more difficult--if not impossible--with widespread use of securitization. If this financial scam was to succeed, mortgages would have to be changing hands dozens of times, going from loan originators to banks to Wall Street investment houses, which would collect them by the thousands and package them into complex debt instruments that would be chopped up into shares and sold off to multiple investors all over the world. Few people, if any, other than those conducting the operation, understood what was going on. The main point was that hundreds of billions in bankster "profits" would soon be available for the taking.
Essentially, the banksters needed a quick, clean way of reassigning mortgages without having to go through the "cumbersome" process of recording them with county courts and recorder offices. But instead of working with municipalities to modernize title registration by a creating a national database that was aboveboard and that everyone could use, the bankster industry did what it does best: it hid the information with sly accounting tricks.
And this deception succeeded beyond their wildest dreams. In just a few short years, MERS quietly took over the bulk of residential mortgage registration! There are about 80 million residential mortgages in America today, and MERS now tracks 60 percent of them.
"[M]ortgage bankers formed a plan to create one shell company that would pretend to own all the mortgages in the country--that way, the mortgage bankers would never have to record assignments, since the same company would always 'own' all the mortgages," wrote University of Utah law professor Christopher Peterson, who wrote a key paper on MERS and the mortgage industry.
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