Municipalities Losing Billions in Mortgage Recording Fees

The AP estimates if every mortgage tracked by MERS (Mortgage Electronic Registration Systems) had been resold and re-recorded just one time, it would save the banking industry $2.4 billion in county filing fees. But most mortgages are sold and resold a dozen times, which means MERS perhaps kept some $30 billion from going into local government coffers. Counties tend to use recording fees to fund courts, low-income housing programs or schools. In this respect, MERS's role in acting as a mortgagee of record is simply a tax evasion tool, says Christopher Peterson (pictured), Associate Dean for Academic Affairs, S.J. Quinney College of Law University of Utah.

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Yasha Levine has reported extensively on MERS (Mortgage Electronic Registration Systems), created in 1995, ostensibly to modernize registering and tracking of mortgages. Levine says the folks who developed the MERS concept were connected with Fannie Mae and Freddie Mac, as well as the people like Brian Hershkowitz, former director of the Mortgage Bankers Association and founder of the association?EUR??,,????'?????<

Since Colonial days, real estate recording laws required lenders to file all mortgage transactions with the county where the property was located. It was simple to ascertain who owned a property. Today, MERS is the recorded owner of over half of the nation?EUR??,,????'?????<

MERS was founded, Levine asserts, because bankers needed a quick way to reassign mortgages and avoid recording them with county courts and recorder offices, keeping many homeowners from finding out who actually holds their mortgage.

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Professor Peterson, writes: "Before MERS, it would not have been possible for mortgages with no market value . . . to be sold at a profit or collateralized and sold as mortgage-backed securities. ?EUR??,,????'?????<