An Express Article from the California Land Title Association
Bulletin 10/11-52 - December 3, 2010
The Washington Post reported that Rep. Marcy Kaptur (D-OH) is asking the Department of Housing and Urban Development to study how a federal land title system could operate to protect states' rights. Her legislation, HR 6460, bans Fannie Mae, Freddie Mac and Ginnie Mae, from purchasing, securitizing, owning or dealing with any mortgage that is registered with the MERS system.
Generally, under HR 6460, Government Sponsored Entities would have six months after enactment to either divest themselves of the loans registered with MERS or record assignments in the local land records removing MERS from the mortgage and listing the current proper mortgagee. MERS has faced attacks claiming that it undermines state recording laws and fails to comply with state laws on mortgage assignments. MERS' defenders have pointed to court cases upholding the system.
The proposal also requires HUD, with the assistance of the GAO, to issue a report on land title recording systems. Within one year of enactment, HUD must issue a report on 1) The impact of the lack of uniform recording standards across the states, including the lack of electronic recording systems; 2) The states progress in establishing electronic recording systems; 3) the current role of federal oversight in the recording process; 4) Ways to entice states to adopt uniform electronic recording systems; and 5) The possibility of creating a federal land titling system.
The California Land Title Association will be working closely with the ALTA regarding how best to respond to this legislation and the issues of state recording laws and MERS.