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MERS is the acronym for "Mortgage Electronic Registration System" and is also the subject of a lot of controversy as foreclosures continue to erase the American Dream from the lives of millions of Americans.

At issue is the fact that MERS, as an electronic registry of sorts, claims to "hold" over 50 million mortgages on behalf of its member lending and financial institutions - and, thereby, also claims to have the right to foreclose on homeowners in default. This right, allegedly, evolves from MERS serving as a "nominee" for the lender at the closing of a given mortgage transaction.

In many instances, borrowers simply have never read the fine print at the top of their mortgage document at the closing of their mortgage transaction and never even noticed the few lines stating something to the effect that MERS is serving as a nominee for the transaction. In many instances, MERS is never even mentioned.

The essence of the growing MERS problem is explained in an article by Moe Bedard on June 18, 2008 entitled "The MERS Fifty Million Mortgage Meltdown":

http://loanworkout.org/2008/06/the-mers-fifty-million-mortgage-meltdown/

The following excerpt says it all:

"In reality MERS is really nothing more than a shell, or a front corporation for its so-called "members". Many of these MERS members were once some of the most prestigious names in American finance. Many MERS members are now reporting hundreds of billions of dollars of losses as result of their ill conceived scheme to ramp up mortgage origination so they could pretend to flip millions of mortgage loans into trusts in exchange for trillions of dollars of investors money. One big problem was that the promissory notes were never actually delivered to the trustees of these trusts. Therefore these trusts have no evidence of ownership of the debts they purportedly purchased."

The MERS issues are being tried in the courts all over the country as more and more judges are realizing that this "stream-lined mortgage marketing scheme" may have, in fact, totally compromised the requisite legal standing necessary for either MERS as a nominee, or its member, to foreclose.

If you think there's a housing and mortgage crisis now, consider what would happen if over half the residential mortgages in the country (the ones held by MERS as a nominee) were not foreclose-able.

Check your mortgage documents carefully before you throw in the towel.

- Ed Smith