The National Association of Independent Land Title Agents (NAILTA) has announced that it is opposed to a provision in legislation offered by Senator Bob Corker (R-TN) that would create “MERS 2”, a federal mortgage registry modeled after and designed to replace the existing bank-owned MERS mortgage registry.
In its position paper on the Corker bill, Senate Bill 1834, NAILTA says that it “is opposed to any reconstituted MERS system because the MERS model is a deeply flawed system that continues to harm consumers, small business owners, and county governments across the United States.”
According to NAILTA, “[A]ny consideration of creating a new MERS without having successfully resolved the well-known flaws and inadequacies of the previous MERS system is a foolhardy exercise. S.B. 1834 proposes no solution to the prevalent flaws with the current MERS system. Instead, it merely seeks to establish MERS 2.0 based upon the MERS in use on the date of enactment.” One of those purported flaws in MERS is that it “fails to reconcile 50 states worth
of mortgage recording and foreclosure law.”
NAILTA claims that MERS, a system “built by the mortgage industry, for the mortgage industry” according to its founders, has harmed the land title industry in particular by shifting the business of title insurance away from title professionals and toward banks. NAILTA says that MERS has also damaged land title records and deprived local governments of fees used for general purposes such as public safety.
NAILTA characterizes MERS 2 as a Federal Torrens title system– subject to the considerable expense and difficulty of reconciling states’ differing recording and foreclosure laws into one system. MERS failed because of the same pitfall, and consumers, county governments, and title agents have borne this expense while only the owners of MERS have benefited, according to NAILTA.
NAILTA has contacted Senator Corker’s office and requested a meeting with the Senator, to express its “deep reservations and opposition concerning MERS and the specific problem we have with [the MERS 2] provision.”