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Questions on Loan Registry Status Could Affect Foreclosure Lists

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By : John Cutts    99 or more times read
Mortgage Electronic Registration Systems (MERS), a loan registry firm in Reston, Virginia, has been the subject of legal concerns in the past nine months. The controversy is expected to have an effect on foreclosure listings all around the U.S.

MERS is reportedly involved in millions of foreclosure listings by state, including thousands of distressed property filings in Utah. The name of the firm started appearing on foreclosure notices once the housing crisis started.

The loan registry company was established in 1994 with the aim of saving money on recording fees and paperwork. Lenders who put loans under the registry were able to avoid filing public documents every time a mortgage is purchased or sold.

According to MERSí estimate, over $1 billion were saved by mortgage lenders since the registry firm was established. The business enterprise has also been credited for playing a major part in the growth of the housing market and the mortgage backed securities industry.

However, once foreclosure numbers started to rise, the name of the company started appearing on foreclosure notices that have been sent to delinquent borrowers. This puts the legal status of the company in questionable light and real estate analysts have proclaimed that the situation can affect foreclosure lists all around the U.S. and the recovery of the nationís housing industry.

Some mortgage industry analysts have stated that the firm violated the law of transparency required in transactions governing land ownership. They added that MERSí process of operations also denied counties recording fees that could have been worth millions of dollars.

In addition, analysts argued that the company violated laws by allowing loan providers to pursue foreclosures using the companyís name instead of the lenders. The loan registry firm has approximately 60 million mortgages under its name, including VA home listings, distressed property filings in various areas of the U.S. and other foreclosed homes.

Meanwhile, a MERS executive has asserted that the companyís process makes data on mortgages more reliable and accurate, which lowers the costs of filings considerably. Supporters of the company further added that the housing crisis would have been worse if MERS had been out of the picture.

A big number of foreclosure listings and filings all around the country could be affected by the legal controversies surround the loan registry firm. Authorities are still looking into the issue as homeowners and lenders sit tight to see what the outcome would be.

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