Plank after plank of the mortgage recording company MERS’ business model has come under attack. To date, the results do not look good for the embattled company.
MERS has repeatedly insisted that its operations are legal. It would be more accurate to say that insufficient attention was paid to legal issues when the firm was created and the permissibility of its operations were under the radar and hence in a legal grey area for many years. Now that they have been challenged in court, MERS has had to retreat from many positions it took in public. Despite its protestations that everything it did was kosher, the database firm has now retreated from one of its widespread practices, of allowing foreclosures to be made in the name of MERS, after a number of state supreme courts and Federal bankruptcy courts issued rulings to the contrary.
Not surprisingly, MERS has the look of a company in trouble. Not only did its president R.K. Arnold resign in early January, but its corporate secretary, Bill Hultman, who among other things supervised its legal department, was demoted a few days ago. Having read a few of Arnold’s and Hultman’s evasive and damaging depositions, I have to wonder where the board has been all these years. This move is long overdue.