Sunday, February 13, 2011

NY Banko Judge: MERS Is in Trouble

Long story short: the vehicle by which millions of mortgages moved from originator to the "securitization" status is flawed. The decision could, possibly, invalidate millions of transactions and dump them back into the originators' laps--if the originators are still around.

(That's not nuanced. That's the "short" story.)

This Court finds that MERS’s theory that it can act as a “common agent” for undisclosed principals is not support by the law. The relationship between MERS and its lenders and its distortion of its alleged “nominee” status was appropriately described by the Supreme Court of Kansas as follows: “The parties appear to have defined the word [nominee] in much the same way that the blind men of Indian legend described an elephant – their description depended on which part they were touching at any given time.

This could become very messy.


No comments: