As I mentioned here several weeks back, a handful of successful lawsuits against mortgage conglomerate MERS are being won across the country. Well, that trickle is now a stream. Watch out for the deluge. What is MERS? Mortgage Electronic Registration Systems is a 50-employee company founded just 16 years ago in Reston, VA. Today, MERS controls some 60 million home loans in this country – half of the entire inventory of active mortgages.
Like most horror stories during Great Depression II, MERS has its beginnings with Big Bad Banking, this time with help from the then government-controlled Fannie Mae and Freddie Mac along with JP Morgan Chase, B of A, Wells Fargo and others. With the repeal of the Glass-Steagall Act by President Bill Clinton, Wall Street investment banks began the “securitization” of mortgages. Packaging these into massive mortgage-backed securities necessitated a streamlined, uniform way to buy and sell newly-minted mortgages.
Most of us don’t remember, but in the old days, when you took out a mortgage to buy a home, a record of your indebtedness was recorded with your deed at the office of your local County Recorder. Today, while your original note-in-deed of trust is recorded, successive sales of your loan to a new bank, investment fund or Saudi prince are not recorded in the county where your property is located. Your mortgage is registered electronically in what may turn out to be the comeuppance of the evil Wall Street banking industry.
Courts in Massachusetts, Arkansas and New York have recently ruled in varying degrees that MERS mishandled foreclosure actions, improperly deputized bank employees as MERS vice-presidents and lacked legal standing. MERS has been accused of abysmal record keeping with one study finding that 70 percent of the true owners of mortgage loans are incorrectly identified.
Judges are routinely siding with long-suffering homeowners who cannot ascertain who actually owns the debt on their homes. In some cases courts simply settle the case by tearing up the note and handing the homeowner the real American dream – their home free and clear of mortgage debt.
Of course, this scares the living daylights out of Big Bad Banking. Industry spokespeople downplay the number and success of these cases in hopes their foreclosure and loan non-modification schemes will continue to generate obscene profits forever. MERS, however, has receded into survival mode with its CEO quitting and a constant disgorgement of tusch-covering memoranda to its lender partners which are essentially an exercise in complete denial.
And, it’s not just homeowners whose sights are set on this big target. Clued-in county government officials – long cheated of recording fees by MERS – may have found a way to plug gaping holes in their strained budgets. Look for them to collect a big juicy pound of flesh if MERS continues to spiral downward. I love it when good triumphs over evil!
A marked market shift?
I am getting some anecdotal and intuitive sense that our metro San Diego residential real estate market is perking up. Our office logged its most successful month ever in opening new escrows in January (yes, a shameless plug) and my colleagues at other firms echo the upbeat tempo. Oh, yes, and my trick knee is aching … always a sign of good things to come.
Called into active duty this past weekend, I volunteered to assist ARG agent Dan Larson with a Property Marketing Event at the newly-listed home of Astoria West Home Staging owners Richard Turner and Jim Harrison. As the least crucial member of the sales team, I got the grunt job of sign/flag placement and removal for both Saturday and Sunday.
Wow, what a cathartic couple of hours that was. Home shoppers pulling up to my car asking for directions to the property, homeowners offering selling tips for the neighborhood and 114 people through the property in just eight hours! Phew.
If this turns out to be the beginning of a long period of appreciation, just remember you heard it here first in the San Diego LGBT Weekly.
The house, by the way is the quintessential Kensington Spanish home on a private, quiet Canterbury Drive lot with incredible outdoor living spaces, spacious single level plan, granite kitchen, in-ground spa and oozing charm from every original light fixture and archway. Listed at $875,000. Contact Dan Larson at dan.larson@argsd.com for more information and a private tour.
Jim Abbott is the President/Managing Broker of ARG Abbott Realty Group DRE LIC 1843472. He serves on the Board of Directors of the Nat’l. Assn of Gay and Lesbian Real Estate Professionals. He is a former board member at EQCA, SDAR, CAR and a past Library Commissioner for the City of San Diego. He can be reached at info@argsd.com or at his downtown office where his adult children pretend to let him run the company.
