MERS has 3,246 member companies and about half of outstanding mortgages are registered with the company, including loans purchased by government-sponsored entities Fannie Mae, Freddie Mac and Ginnie Mae, said R.K. Arnold, the company’s CEO.
For about half of U.S. mortgages, there is no tracking mechanism.
MERS rules don’t allow members to submit lost-note affidavits in place of mortgage notes. A lot of companies say the note is lost when it’s highly unlikely the note is lost. Many complaints routinly add a Count in their complaint for the “Restablishment of a lost Note”. If you get served with a Foreclosure Complaint that has this count in, it should be a red flag.
Saying a note is lost when it’s not really lost is wrong. Saying a note is lost when it really can’t be located, means that the person foreclosing on your property as a major problem. Either way, it’s not good for the Lender.
Now banks have been keeping track of these Mortgage Notes for hundreds of years without many major problems. But times have changed, technology has changed.
So if you start from the point that these notes aren’t really lost, then it’s very concerning, that they are saying that they have when they haven’t. Why are they doing this? Remember these foreclosure mills are under very strict time restainsts imposed by the servicing companies. Many agreements provide for penalties in the form of a fee reduction, if the case takes longer than the time frame imposed by the servicer.
If you start from the premise, that these notes are lost, then you’ve got a viable defense to the foreclosure action. A response to the complaint challenging this lost note clause to preserve your rights and your home.
One of the problems here is that the homeowner fails to file any defence or response to the complaint, and the case goes by way of a “Default Judgement” in favor of the lender.
This practice must be challenged more often.