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Thursday, March 24, 2011

Freddie Mac eliminates option to foreclosure in the name of MERS

by Calculated Risk on 3/24/2011 12:40:00 PM

From Freddie Mac Bulletin: Eliminating the option to foreclose in the name of Mortgage Electronic Registration Systems Inc. (MERS) (ht Soylent Green is People)

We have updated the Guide to eliminate the option for the foreclosure counsel or trustee to conduct a foreclosure in the name of MERS. Effective for Mortgages registered with MERS that are referred to foreclosure on or after April 1, 2011, Servicers must prepare an assignment of the Security Instrument from MERS to the Servicer and instruct the foreclosure counsel or trustee to foreclose in the Servicer’s name and take title in Freddie Mac's name.

As required in Section 66.17, Foreclosing in the Servicer’s Name, Servicers must record the prepared assignment where required by State law. State mandated recording fees are not reimbursable by Freddie Mac, are not considered part of the Freddie Mac allowable attorney fees and must not be billed to the Borrower.

Servicers should refer to updated Section 66.17 and Section 66.54, Vesting the Title and Avoiding Transfer Taxes, for additional information.
This makes sense and avoids some legal battles. Some day all the MERS issues will be behind us (I don't think there are any systemic risks).