is there broken title when the closing documents indicate that the note and deed are to be recorded with MERS? and there is no record.

Asked by mgalati129, Los Angeles, CA Mon Oct 29, 2012

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Ron Escobar - Local Expert’s answer
Ron Escobar -…, Agent, Beverly Hills, CA
Tue Oct 30, 2012
You are asking a very technical question that may have many interpretations depending on the facts of your case. I would not rely on any advice on this forum, and instead would seek a title insurance policy by a top rated title insurance company.

That said, MERS is a database for which banks/servicers/note-holders belong to... rather than recording each time the note and or deed is assigned to another, they recorded to MERS, and MERS keeps track of who it is assigned to... then if there is a transaction that warrants it, they record the last transaction with the county.. supposedly they get around the legal requirement of recording the assignments because they all belong to the MERS entity... There are many legal theories for and against it... since it is so popular and big in the system, most courts go along with it, otherwise it would destroy the system and create chaos.. however there are some judges that rightfully so (I think) question the validity of the transaction and title chain...

If you cannot get a title insurance policy, you may have to go to court and file a "Quiet Title Action" suite where the court would rule and clear all title issues.

I hope this helps you, if you like my answer give it a Thumbs Up! or select it as the Best Answer.

Ron Escobar
0 votes
carlos parra…, Other Pro, Monrovia, CA
Tue Oct 30, 2012
It is likely, however, a more extensive Title search may be warranted. Do you have an ALTA Residential Title Insurance Policy? This may help.
0 votes
Steven Ornel…, Agent, Fremont, CA
Tue Oct 30, 2012
mgalati129,

The link below provides a short write-up on MERS:

http://en.wikipedia.org/wiki/Mortgage_Electronic_Registratio…

"The company is the owner of record (or the owner's nominee) of the security interest arising from mortgages extended by lenders, investors and their loan servicers and recorded in county land records. By using MERS, the lenders and investors who are the real parties in interest avoid the need to file assignments in county land records, which lowers costs for lenders and, they claim, consumers by reducing county recording fee expenses resulting from real estate transfers[7] and provides a central source of information and tracking for mortgage loans.[8] The company's role in facilitating mortgage trading was relatively uncontroversial in its early days a decade ago, but continued fallout from the subprime mortgage crisis has put MERS at the center of several legal challenges disputing the company's right to initiate foreclosures. Should these challenges succeed, the US banking industry could face a renewed need for capitalization.[9]"

I suppose the answer to your question may be a State-by-State decision based on case law and/or a Federal case determines this.

-Steve
0 votes
Douglas Perez, Agent, Los Angeles, CA
Mon Oct 29, 2012
In my opinion it is broken unless it is disclosed in an attorney-in-fact.
0 votes
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