I need to leave Mortgage Electronic Registration Systems

November 8, 2009 12:33 PM

I signed up for a "pay half your mortgage twice a month" thing and now Mortgage Electronic Registration Systems (MERS) is a little too involved for my liking. Help me leave them.

I got a funny feeling about MERS so I started doing some research. While not 100% scam, they seem to get between a homeowner and their mortgage provider, which can lead to all sorts of trouble. (wikipedia info)

A few days ago, I got an Appointment of Successor Trustee and a Deed of Reconveyance, which I've never seen after 6 years of my loans being sold to people willy nilly.

So now I want to leave, but have to wait until tomorrow when they're open. My concern is that I'll call and they'll basically say I can't leave and dare me to press the issue. And then I'll call MetLife, who I originally got the loan from, who will say it doesn't concern them. At that point I'm not sure what I'll do, so I wonder if anyone has any suggestions.

Thanks.

posted by jragon to Home & Garden (8 answers total)

The words "I am going to call my state Attorney General's office next" works wonders for scammy businesses like this. Look up your state AGs office and the consumer/anti-fraud division so you know exactly who to call next.
posted by Mid at 12:50 PM on November 8, 2009 [2 favorites]

That wikipedia article is not good. They make it seem like MERS goes around inserting itself into transactions it wasn't involved in. Which doesn't seem to be the case at all.

MERS only gets involved if the lender wants them to. So if they are involved, then MetLife got them involved, either by selling your mortgage, or engaging their services when they initiated the loan.

What concerns me is that you say you signed up for this different payment scheme- who did you sign up with? Did you inadvertently refinance your loan with another company? Who do you send your money to? Did that change?

The only "controversy" with MERS is one of legal technicality- who has standing to file for foreclosure. MERS, as the lender's agent, or must the lender do it?
posted by gjc at 1:32 PM on November 8, 2009

Response by poster: What concerns me is that you say you signed up for this different payment scheme- who did you sign up with?

I thought it was MetLife themselves, until I noticed I was charged $250 and MetLife threatened to send me into foreclosure for being late, despite the fact I had been paying the whole time.

When I called to figure out why they thought I was late, they explained that I was now doing business through this other service, and I still owed one more month directly to MetLife. MetLife knows about and encourages this company's use, but they're not the same.

To be perfectly honest, I don't know if the payment scheme signup form mentioned MERS or not. Maybe it did say MetLife on the header with MERS only in the fine print.
posted by jragon at 2:01 PM on November 8, 2009

Best answer: From working in a foreclosure law firm for a few years, I can tell you that MERS isn't some shady scam operation. They're not great, but they're a very established entity. The basic function of MERS (and what the acronym means) is that they handle the behind the scenes transferring of mortgages. Mortgages get bought and sold, transferred etc all the time, and it's technically MERS' job (when they've been assigned the mortgage from the owner) to keep track of everything. As we can all see with the current mortgage SNAFUs that are happening, MERS isn't doing such a hot job of keeping track of everything...

anyway, MERS isn't a lender, and they are ALWAYS an intermediary, NOT the lender or owner of the mortgage, they're just a glorified secretary, shuffling paper work to and fro until a lender takes possession of the mortgage. This is why many judges (in Ohio, at least) wouldn't let a law office foreclose in the name of "MERS," it had to be, "MERS as Nominee for Bank X".

Definitely keep talking to MetLife and check your statements that you have paid recently and see WHO you're sending your checks to and contact them. Be sure to document all of your telephone calls and correspondence. Make photocopies of any checks and statements that you send to keep for your records. I would hesitate to bring in the AG's office into the conversation until you know that something untoward has ACTUALLY happened.

Good luck!
posted by ThaBombShelterSmith at 2:57 PM on November 8, 2009 [1 favorite]

The only "controversy" with MERS is one of legal technicality- who has standing to file for foreclosure. MERS, as the lender's agent, or must the lender do it?

Requiring MERS to prove that they have standing to force people out of their own homes isn't some mere technicality, its required in the interest of justice, and by federal statute, state statute, and common law. If you're interested, In re Mitchell (pdf) describes how MERS tried to kick 27 homeowners out on to the street without being able to prove it had any right to do so.
posted by mattbcoset at 4:39 PM on November 8, 2009

Why pay some third-party to do the "twice-a-month" payment thing when the terms of your note probably let you do that already?

Almost all mortgage-backed notes allow the borrow to prepay without penalty. So, using this month as an example, make sure your November payment is paid in full on November 1st (or whatever day the note says payments are due). Then, 2 weeks later on November 15th, pay 1/2 the December 1st payment. Then, on November 30th, pay the other half. Continue doing so until paid in full.

The only "trick" to this is that you have to basically prepay one month's mortgage payment the very first month that you start doing this schedule. Even if you have to give up the $250 bucks you paid to enroll in this gimmick, you'll still be far more ahead after a few years of pre-paying.

Just check your note for no prepayment penalties and that partial payments are permitted. You can also save quite a bit of interest by doing 13 payments in a year rather than 12.

Finally, mattbcoset is right on and that is a trend that is spreading across the country. There have been a number of judges in several states that have thrown out foreclosure cases en masse because the alleged holder of the note/mortgage can't prove that they do in fact own it. This is not a mere technicality as some would believe, because one of the cornerstones of real estate law in the U.S. is confidence in the chain of title (i.e., the person selling you a piece of property really does own it). MERS was created by the mortgage industry to efficiently process the mortgage process. Giving a loan and then selling it off on the secondary market doesn't involve the judicial process, thus the industry was able to take a lot of shortcuts in coming up with this system of "nominees." Like so many other shortcuts they took, this one is coming back to haunt them now that a disinterested judicial system is forcing them to comply with long-standing statutory and legal requirements on the foreclosure side.
posted by webhund at 6:40 PM on November 8, 2009

Just make 13 payments per year, or divide one payment by 12 and add that amount to your monthly payment. Why do people pay $250 or $350 to se this up? Read the contract.
posted by fixedgear at 6:53 AM on November 9, 2009

Response by poster: Why pay some third-party to do the "twice-a-month" payment thing when the terms of your note probably let you do that already?

Why do people pay $250 or $350 to se this up? Read the contract.

It was convenient and I thought it was free. Then I realized it wasn't and here we are.

--

Wrap up for Googlers that end up here:
I just called MetLife, didn't have to wait on hold, got great service from two different people, cancelled the program, got my $295 back (although they did try to offer to "hold onto it" in case I wanted to come back without the hassle of paying again), and had a generally excellent experience. So that was nice.

Thanks to those who answered my question!
posted by jragon at 12:56 PM on November 9, 2009 [1 favorite]