NY Times On MERS' Ruling From The Kansas Supreme Court

The New York Times reports:

• WITH the mortgage bust approaching Year Three, it is increasingly up to the nation’s courts to examine the dubious practices that guided the mania. A ruling that the Kansas Supreme Court issued last month(1) has done precisely that, and it has significant implications for both the mortgage industry and troubled borrowers.

• The opinion spotlights a crucial but obscure cog in the nation’s lending machinery: a privately owned loan tracking service known as the Mortgage Electronic Registration System. This registry, created in 1997 to improve profits and efficiency among lenders, eliminates the need to record changes in property ownership in local land records.
  Dotting i’s and crossing t’s can be a costly bore, of course. And eliminating the need to record mortgage assignments helped keep the lending machine humming during the boom.

• Now, however, this clever setup is coming under fire. Legal experts say the fact that the most recent assault comes out of Kansas, a state not known for radical jurists, makes the ruling even more meaningful.

For more, see The Mortgage Machine Backfires.

In a related post on MERS being hammered in court, see Judge Slams Sloppy Lender Unable To Prove Note Ownership; Voids Debtor's $461K Home Loan; Docs Signed By Multiple Hat-Wearing VP Sinks Servicer, MERS.

(1) Landmark Nat'l Bank v. Kesler, No. 98,489, 2009 Kan. LEXIS 834 (August 28, 2009), affirming Kansas Court of Appeals in Landmark Nat'l Bank v. Kesler, 40 Kan. App. 2d 325, 192 P.3d 177, 2008 Kan. App. LEXIS 138 (2008). EpsilonMissingDocsMtg