Restructuring

Contributed by Lee Jason Goldberg
In May, we posted a three-part series (part I, part II, part III) on the legal quagmire surrounding Mortgage Electronic Registration Systems Inc. (“MERS”) entitled, “The MERS Morass.”  This week, the Washington Post published an article entitled, “‘MERS morass’ is hanging up negotiations on foreclosure settlement.”  According to the Post, “State and federal officials negotiating a settlement with the nation’s biggest banks over shoddy foreclosure practices are hung up on how they should deal with a Reston-based company that has acted as a proxy for financial firms throughout the country for more than a decade.  Some officials refer to the dilemma as the ‘MERS morass,’ referring to Mortgage Electronic Registration Systems, whose vast but controversial registry contains roughly 65 million mortgages.”
These officials have been using the phrase “MERS morass” to describe, in the Post’s words, the “patchwork of conflicting laws and court decisions in different states” for mortgages and foreclosures in which MERS is involved.  That patchwork “makes a one-size-fits-all solution difficult,” the Post reports such officials as saying.  Indeed, in our series, we analyzed how courts have applied different states’ laws to resolve issues relating to MERS.  In the coming weeks, we will be exploring further issues raised around MERS and how courts throughout the country have responded.  Stay tuned!