University of Utah Law Professor and frequent MERS critic Christopher L. Peterson has been hired into the enforcement unit of the federal Consumer Financial Protection Bureau.
Peterson has been a leading critic of MERS, writing several papers and articles questioning the legal foundation underlying MERS mortgages. He has frequently expressed anti-MERS views in numerous forums, including testimony to Congress. Peterson was a featured speaker at the 2011 NAILTA annual conference.
In 2011, Peterson published a lengthy law review article, "Two Faces: Demystifying the Mortgage Electronic Registration System's Land Title
Theory", in which he distilled his criticisms of MERS. In the paper, he described MERS's legal position as incoherent-- requiring MERS to take transparently inconsistent positions in court cases. Peterson wrote:
On the one hand, MERS purports to act purely as a "nominee"-a form of an agent. On the other hand, MERS also claims to be an actual mortgagee, which is to say an owner of the real property right to foreclose upon the security interest. That a company cannot be both an agent and a principal with respect to the same right is axiomatic. In litigation all across the country, attorneys representing MERS frequently take inconsistent positions on the legal status of the company, depending on the legal issue at hand.
In the paper, Peterson laid out several other criticisms of MERS. Peterson strongly criticized MERS's practice of "farming out its identity" to thousands of its members' employees and their foreclosure agents for signing purposes, calling its corporate structure "so unorthodox as to be considered arguably fraudulent". He portrayed MERS's public-facing portals purporting to disclose ownership interest in mortgages as inadequate and opaque, insufficient to allow searchers to identify errors in the chain of title and inadequate for homeowners to discover the rights of the owner of the mortgage interest in negotiating mortgage modifications.
Peterson also expressed the view that some legal theories that would allow county recorders to recover back recording fees could have merit.
Peterson suggested several actions that various institutions could take in order to rein in MERS-- suggesting that Fannie Mae and Freddie Mac should step away from MERS and require that traditional mortgage assignments be recorded on mortgages they securitize, and that state legislators should enact bans on the use of nominees in land records to obscure actual ownership interests.
Peterson has also been a vocal critic of payday lenders, both in his role as a law professor and prior to that as a lobbyist for consumer rights.
For Robert Franco's take on some of Peterson's legal theories regarding MERS, see Chipping Away at MERS: Mortgages May Be Unenforceable, Source of Title Blog, 10/26/2010.