Posted Nov 01, 2010 11:15 pm CDT
In the latest challenge to a controversial nationwide method of registering mortgage ownership, a Virginia lawmaker is requesting an opinion from the state attorney general on whether Mortgage Electronic Registration Systems is required to pay a fee every time a home loan is transferred.
MERS is the glue that holds together tens of millions of securitized mortgages, acting as the agent for the lender in foreclosure actions, for example. But amidst a tidal wave of foreclosures, some are now questioning whether the company has the legal power to do so. In Georgia, attorney David Ates filed a state-court suit last week seeking class action status that contends the practice is invalid, the Wall Street Journal reports.
However, the company’s chief executive, R.K. Arnold, says homeowners agree to this system in the mortgage paperwork they sign at closing so it is entirely legal.
“We can foreclose in all 50 states, and we will continue to do that,” he tells the newspaper.
Related earlier coverage:
ABAJournal.com: “Was Mortgage Registration System Built on ‘Foundation of Sand’?”