The American Securitization Forum (ASF) has issued a white paper defending the role of the electronic mortgage system in the assignment and transfer of home mortgages and mortgage-backed securities.
The report, titled ‘Transfer and Assignment of Residential Mortgage Loans in the Secondary Mortgage Market,’ supports the role of the Mortgage Electronic Registration Systems (MERS) in the process. Although it notes that the use of MERS has been challenged on the grounds that it does not have the authority to foreclose on a mortgage, ASF points out that numerous court decisions ‘have found the assignment and transfer of mortgages to MERS does not adversely impact the ability to foreclose on a mortgage.’
‘As our study highlights, the principles and processes involved in securitization result in valid and enforceable transfer of ownership of mortgage notes and underlying mortgages,’ says Tom Deutsch, executive director of the ASF. ‘Further, the transfer and legal effectiveness of such ownership is not diminished by the fact that the right to foreclose may be subject to additional conditions and requirements of a particular mortgage.’
The full report is available online.
SOURCE: American Securitization Forum