Will MERS Exam Be a Whitewash?

As a practical matter, the incoherence of MERS’ legal position is exacerbated by a corporate structure that is so unorthodox as to arguably be considered fraudulent. Because MERSCORP is a company of relatively modest size, it does not have the personnel to deal with legal problems created by its purported ownership of millions of home mortgages. To accommodate the massive amount of paperwork and litigation involved with its business model, MERSCORP simply farms out the MERS, Inc. identity to employees of mortgage servicers, originators, debt collectors, and foreclosure law firms.

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Between this deposition, and an earlier one of MERSCORP president R.K. Arnold by Nick Wooten, one get a more complete picture of how lax MERS’ operational controls are. MERS does keep a record of who its certifying officers are, but it has not record of what actions any particular certifying officer has taken. This would seem to be a fatal shortcoming in conducting any kind of audit. Arnold maintained that MERSCORP did various quality reviews, but was unable to say what they consisted of or even who on his team was responsible for them.