Well, let's examine evidence here before we call people liars. 

The author makes the following two statements:

"When the antiquated local title recording system failed to meet the needs of national lenders, they created a separate, private, limited access system to record and track residential mortgage assignments."

"In 1993, frustrated by the cost and time involved in complying with state laws regarding the recording of mortgage assignments, the residential mortgage industry created the Mortgage Electronic Recording System (MERS), a private, parallel recording system."

So first of all, the author does acknowledge that the cost of recording was an issue, as well as speed.

As far as which was the more important consideration? Well, we all know that money talks, and the alleged $2 billion that banks have saved in recording fees is an obvious and admitted consideration in the creation of MERS.  But to say that the author is lying when she mentions that time was also a consideration is probably being unfair to her.  Time is money, the saying goes, and there is evidence that recorders offices in many jurisdictions were failing to record mortgage assignments in a timely manner around the timeframe that MERS was being created.

In a brief seach of news articles in the early-to-mid nineties, here is a sampling of the numerous reports of backlogs at a number of recorders' offices in heavily populated areas:

The allure of low interest rates had a huge impact on the county register of deeds office again last year, prompting a mojor increase in the workload and a longer backlog in filings.

...

"We're still having a big problem in trying to handle this workload," [Register of Deeds Michael] Hasslinger said.  Last year at about this time, theree was a 12-week backlog in recordings.  That's up to 14 weeks now, even though Hasslinger has added temporary help and is using staff on overtime to work 1 1/2 shift days.

Rush to refinance homes results in big backlog at deeds office-- Milwaukee Journal, 1/19/1993

City Controller Jonathan A. Saidel has released an audit of the city Records Department that found a backlog of about 30,000 unrecorded real estate documents and delays of up to six months in recording new documents. "To me, this is an intolerable situation," Saidel said in a statement.

Audit finds backlog, delay in city records department, Philadelphia Inquirer, 2/23/1995

Cobb commissioners have taken the first step in what they hope will solve the county's eight-week backlog in the real estate deed office, but court officials say the office still needs more staff and a better computer.

Six temporary positions approved to help alleviate backlog of tax deeds, Atlanta Journal Constitution, 2/24/1994

Millions of dollars in mortgage taxes and recording fees are stashed in envelopes in the Nassau County Clerk's office, rather than on deposit in banks, because layoffs have created a three-month backlog in the recording of deeds and mortgages.

...

The backlog, which has grown from 8 weeks in October to 13 weeks, has been aggravated by budget cuts that eliminated 54 of the County Clerk's 130 employees and by an antiquated system of recording mortgages that is labor-intensive.

"It's absurd," said the North Hempstead Supervisor, Benjamin J. Zwirn, who estimates that North Hempstead is being deprived of at least $3 million due it in mortgage taxes. Had North Hempstead been getting its share of the mortgage taxes more quickly, Mr. Zwirn said, he probably could have avoided some of the 135 layoffs the town has made.

Nassau's Mortgage Crunch; Backlog in Record Keeping Compounds Fiscal Problems, New York Times 3/17/1992

It certainly appears that there were at least several important jurisdictions where recording systems were not working very well around the time that MERS was being formulated.

Furthermore, I am aware of no allegation that the MERS system itself has ever crashed, resulting in a bank not being able to find records.  Banks' failure to find and produce records seem to have been as a result of their own failures to keep track of the paper notes, pooling agreements, and so forth that they sometimes need later on.  They've had the same kind of sloppiness issues in their record-keeping in non-MERS mortgages-- see the Ibanez case in Massachusetts for a high-profile example.

And meanwhile, a recorder's office in a major city (New Orleans) actually did have their system crash just last October, resulting in chaos and leaving land records unavailable for over two months.  In reading the quotes of local real estate and title professionals during that crisis, it did not seem that folks were of the opinion that their local system was working very well.

Look, obviously, I'm somewhat playing devil's advocate here.  I'm not going to sit here and argue that MERS has been a good thing or that it has not caused problems-- it obviously has.  Nor am I here to defend every statement by Professor Marsh, when I do not believe that she has a strong grasp of the whole picture surrounding her proposal.  I just am arguing for a little perspective here and some recognition that the good old days weren't always so good as folks are remembering them to be.

 

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