In many foreclosures, the Mortgage Electronic Registration Systems (MERS) is involved. Originally designed to track servicing rights and ownership of mortgage loans in the United States, MERS is a private company and not a financial institution. MERS serves as the mortgagee of record for lenders, investors and their loan servicers for over 60 million mortgages. MERS claims its process eliminates the need to file assignments in the county land records, a maneuver the New York Times estimates has saved banks more than $1 billion over the last decade

But some judges, and some mortgage analysts, see MERS as more of a corporate cloak.  The New York Times story quotes a a mortgage analyst consulting on foreclosure cases as saying

“I’m convinced that part of the scheme here is to exhaust the resources of consumers and their advocate. This system removes transparency over what’s happening to these mortgage obligations and sows confusion, which can only benefit the banks.”

MERS has only a few employees. It is, after all, just a complex database. So who does all the “work” for foreclosures, assignments, and such? Lenders, title companies, and foreclosure companies, etc. become “member” of MERS. An employee at the rim is then designated a “Corporate Officers” of MERS awith the title of Assistant Secretary or Vice President. This has led to the appearance of conflict. New York State Supreme Court Judge Arthur M. Schack of Brooklyn wrote in a 2008 case, Judge Schack observed that in recording an assignment, the same person acted both as a Vice President of MERS and as the servicing agent of the assignee (HSBC Bank USA, N.A. v. Candida Valentin, 2008 NY SlipOp 52167 (U), 21 Misc. 3d 1124 (A)). In another case, Judge Schack noted that the same person [Erica Johnson-Seck] signed an Affidavit as Vice President of MERS and 28 days later as an officer of DEUTSCHE BANK.