Mortgage Recording ‘Fix’
Falls Short in Oregon
By Nick Timiraos
An effort by the financial services industry to pass a law rewriting mortgage recording requirements in Oregon has died in a state House committee.
Last week, we looked at a federal court ruling that threatened to set back foreclosures in Oregon after challenging the validity of foreclosures done on loans that had been registered with the Mortgage Electronic Registration Systems, or MERS, a private electronic lien-registry network.
According to the Oregonian, the ruling galvanized mortgage companies and title insurers to amend state recording requirements so that banks that used MERS to track ownership of mortgages would face relaxed requirements when bringing foreclosure actions. The amendment would have relaxed requirements that lenders ensure public recording in local land records before foreclosing on borrowers without going to court.
Last week’s decision said that banks should be required to process foreclosures through courts in Oregon for loans that are in the MERS system. While the decision could carry weight in other courts, it isn’t binding in state courts.
A spokeswoman for MERS said the ruling was “inconsistent” with other state decisions, citing two in the past year that found MERS had satisfied state law. The spokeswoman said MERS planned to appeal.
Last year, the Kansas Legislature passed a law to clarify doubts raised by the state’s courts over the proper authority of MERS. But in Oregon, the Legislature ultimately passed an unrelated housing bill without attaching the MERS amendment. Rep. Jeff Barker told the Oregonian that he had received more blowback over the proposed measure “than anything all session.”
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