Just spied this on Zero Hedge and it is a wow. I don't know if this will stand, but if it does it could bring the foreclosure mills to a grinding halt.
What is MERS?
Mortgage Electronic Registration Systems
What do they do?
Wiki
Why should you care?
It goes back to the issue of standing, as in does the entity pursuing foreclosure on a property have standing to foreclose. Servicers on loans that have been sliced and diced into Mortgage Backed Security (MBS) hash use MERS.
“MERS’s theory that it can act as a ‘common agent’ for undisclosed principals is not supported by the law,” Grossman wrote in a Feb. 10 opinion. “MERS did not have authority, as ‘nominee’ or agent, to assign the mortgage absent a showing that it was given specific written directions by its principal.”
Full article here
If this ruling were to stand then delinquent homeowners would only be part of the story. If these mortgages did not in fact convey to the MBS that they fund then purchasers of those MBS are owed refunds for their investments.
Update: Here is a HuffPo piece with a little more background information inspired by comments:
Ibanez decision in Massachusetts. Courts continue to chip away at the arguments made by banks and their Frankenstein creation, MERS, to justify foreclosure without proper documentation. MERS was manufactured by the industry to evade proper recording of property sales in county recorder's offices. This not only cheated the recorders out of fees and Uncle Sam out of federal taxes, but it also broke the chain of title. The fiction perpetrated by MERS is that it is simultaneously a nominee of the true owner of the mortgage debt and at the same time it is the beneficiary of the security instrument. (You cannot simultaneously be the party of interest and the nominee, of course.) It also disclaims any financial interest in the mortgage and has no claim on the mortgage payments. But it claims that it can operate as the agent of unnamed owners of the mortgage instrument, unknown owners who--since they are unknown -- have never designated MERS as agent. The Massachusetts Supreme Court ruled decisively against MERS's claims, and a growing number of other state supreme courts (Nevada, New York, Kansas, Idaho) have agreed that MERS is only a nominee or "straw man" (as Kansas put it) with no standing to foreclose.