H. Impact of Technology on Real Estate Practice

• Jurisdiction: New York

H. Impact of Technology on Real Estate Practice

1. MERS

An interesting player appeared on the horizon in 2001. Mortgage Electronic Registration Systems, Inc. (MERS) and Merscorp, Inc., provide a service aimed at lenders active in the secondary mortgage market. MERS is shown as the mortgagee of record in the land records, and is acting in a custodial capacity for the actual lender in order to facilitate the transfer of ownership of mortgage loans. In theory, at least, this service will result in a benefit to borrowers as well, if it facilitates mortgage loan closings. The company website is www.mersinc.org.

In Merscorp, Inc. v. Romaine,²⁵⁷ MERS won the right, previously deputed by the Suffolk County Clerk, to have mortgages, assignments, and discharges recorded in its name as nominee. However, MERS may be held to a slightly stricter standard when acting; see HSBC Bank USA, N.A. v. Vasquez.²⁵⁸ In that case, an assignment of mortgage from MERS pursuant to a corporate resolution which was not recorded was held to be a nullity.

Having come under increasing scrutiny due to the state of economy,²⁵⁹ MERS has launched something of a counterattack to the bad press it has endured over the last few years. On its website, for example, browsers may search for the servicer associated with a mortgage loan registered on the MERS® System: https://www.mers-servicerid.org/sis.

Lenders on the security of multi-family homes, and prospective buyers, might want to include the MERS site in their due diligence before purchasing the property, as a way to sense whether the occupants of the property might have defenses to the enforcement of...