The Parsippany, New Jersey-based law firm of Fein, Such, Kahn & Shepard, P.C. announced another courtroom win for the MERS (Mortgage Electronic Registry System) in New York last week.
Based on a new court decision, MERS can now serve as a party in-court when dealing with foreclosure actions on loans in the counties of Dutchess, Kings, Nassau, Orange, Putnam, Queens, Richmond, Rockland, Suffolk, and Westchester. Alan Such, a partner at the law firm, says the New York Appellate Division, Second Department, made the decision after determining MERS was able to clearly document loan ownership while also giving debtors sufficient notice to protect their right to save distressed loans.

In the past, MERS, which is an electronic registry that acts as a nominee in county land records on behalf of lenders and services, has said it’s ultimate goal is to establish a nationwide registry for mortgage loans. Such believes the need for such a system is becoming more apparent in the current market where hefty loan volumes and multiple transactions are zapping time and resources.
“The whole idea of MERS and the need for MERS is getting more obvious,” he added. “More and more mortgages are being sold in the open market by funds and REITs on a daily basis. I think if MERS goes ahead with a national database that’s going to be a positive step.”
But, MERS is not without its critics. Such says various skeptics—including one county court official in New York who stands to lose recording fees because of MERS—have deemed MERS prejudiced against borrowers because it prevents them from knowing who owns a loan and does not provide sufficient information on who to contact for loss mitigation purposes.
Such says, in reality, MERS gives borrowers the same information they receive under the current system and plenty of time to utilize the loss mitigation process. “Obviously the MERS registry can give them whatever information they need,” Such asserted.
The New York Appellate Division, Second Department, agreed with Such and his firm, and it’s not the first court to do so. Two months ago, the Second District Court of Appeals in Florida granted MERS the right to officially serve as a party in-court when dealing with foreclosure cases.