SALEM — On Tuesday, the Oregon Supreme Court joined judges across the nation in scrutinizing a system that is responsible for tracking millions of mortgages.
The state’s top justices heard from lawyers on two different cases, but at the heart of both is the same question: What role should the Mortgage Electronic Registration Systems, or MERS, play in the state’s nonjudicial foreclosure process?
The system was created by the mortgage industry, in part, to allow larger banking institutions to quickly transfer mortgages from one entity to another and track the assignments through the private database instead of publicly recording each transfer in local county clerks’ offices.
In July, the Oregon Court of Appeals ruled that MERS must show recordings of each assignment of a trust deed in the county in which the property is located before foreclosing in the nonjudicial process.
Also at issue is whether MERS can act as a “beneficiary” of the loan, which would give it the right to initiate foreclosures and avoid recording each change of assignment, or ownership.
The appeals court ruled the beneficiary is the party to whom the money is owed, and MERS was only acting as the lender’s agent. READ MORE