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Oregon Supreme Court To Consider 'MERS' Mortgage System

The Oregon Supreme Court is expected to hear two cases this week involving the mortgage industry’s Mortgage Electronic Registration System, also known MERS.


When Wall Street started bundling home loans and selling them off to investors, MERS was created as shortcut around county recording requirements. Instead of recording each change of ownership, MERS is listed on the documents as the beneficiary. And often it’s the party that initiates foreclosure.

This summer, the Oregon Court of Appeals ruled that MERS lacked the ability to to foreclose on behalf borrowers under Oregon’s non-judicial foreclosure laws.

Willamette University Law Professor Jeff Dobbins explained, “Part of what the court is struggling with in these cases is trying to figure out whether the MERS shortcut has created a situation in which it’s inappropriate to use this process of non-judicial foreclosure.”

In the wake of the appeals court ruling, non-judicial foreclosures all but disappeared in the state. So both lenders and housing advocates will be waiting to see how the court rules.