State Sen. Suzanne Bonamici (D-Washington County) is sponsoring a bill in the Legislature that could affect thousands of Oregon homeowners.
As reported in today's WW, homeowners have accused Virginia-based Mortgage Electronic Registration Systems of foreclosing on their properties without the correct paperwork or legal standing. The company has faced legal challenges across the country—including from former Portland mortgage broker Dawn Lind, the subject of our story.
Experts say one of the problems with MERS is that it's unclear who actually owns the mortgage for the homes MERS tries to foreclose.
"Today, someone who's being foreclosed doesn't even know who's foreclosing on them," says Phil Querin, a Portland real-estate lawyer.
Bonamici's Senate Bill 484 (PDF) would require original documentation and evidence of the chain of title in any foreclosure proceeding. Otherwise, the lender cannot proceed with the foreclosure. Similar bills are being proposed in other states around the country, Querin says.
Querin calls SB 484 an "anti-MERS bill" because the company is often unable to produce such paperwork. Indeed, for the 60 percent of American mortgages registered under the MERS property database rather than traditional county recorders, such documents may be missing entirely.
With the possibility that thousands of homes in Oregon may have muddied titles, Querin says the title industry—which makes its money guaranteeing clear title to customers—is in a state of uproar. The panic began when a U.S. Bankruptcy Court judge in Eugene ruled last month MERS had no standing to foreclose on a Central Point home, because the paperwork was never publicly registered.
Alan Brickley, an attorney for First American Title Insurance, confirms his company is meeting with Bonamici this morning. When reached by phone on Tuesday, Brickley declined to discuss Bonamici's bill—or address rumors that the title industry plans to push a bill that would make MERS-related foreclosures legitimate.
"I'd prefer not to discuss it until after the meeting [with Bonamici]," Brickley said. "It just seems a little premature."