Alexandria, VA – December 5, 2011 – (RealEstateRama) — A majority of respondents (63 percent) in ABI’s latest Quick Poll think that a debtor should be allowed to claim technical defenses based on the fact that the creditor asserting the claim (e.g., MERS) is not in possession of the note or lacks standing, even if the debtor ahs no substantive defense to liability on a mortgage note. Fifty percent of respondents “strongly disagreed” and 13 percent “somewhat disagreed” with the Poll’s statement that “it should not matter” that the current assignee of the note and mortgage has technical problems with the chain of negotiation and assignment of the note, even though the debtor has no substantive defense to liability on the mortgage note.
As U.S. lending laws state that only the owner of a loan can initiate a foreclosure, class action lawsuits have been brought against Mortgage Electronic Registration Systems (MERS) contending that MERS has no legal right to initiate foreclosures because MERS does not own the loans in question. Reston, Va.-based MERS is a privately held company that operates an electronic registry designed to track servicing rights and ownership of mortgage loans in the United States. There are an estimated 62 million mortgages held in the name of MERS, and MERS has initiated thousands of foreclosures in the U.S., claiming to be the mortgagee of record.
Thirty-four percent of respondents thought, if the debtor has no substantive defense to liability on a mortgage note, that the debtor should not be allowed to claim technical defenses based on the fact that the creditor asserting the claim is not in possession of the note.
ABI’s Quick Poll is posted on ABI’s home page, www.abiworld.org. ABI members and the public are invited to respond to a question on a timely bankruptcy or insolvency issue. Visit http://www.abiworld.net/quickpoll/ to access the results of previous ABI Quick Polls.
ABI is the largest multi-disciplinary, nonpartisan organization dedicated to research and education on matters related to insolvency. ABI was founded in 1982 to provide Congress and the public with unbiased analysis of bankruptcy issues. The ABI membership includes more than 13,000 attorneys, accountants, bankers, judges, professors, lenders, turnaround specialists and other bankruptcy professionals, providing a forum for the exchange of ideas and information. For additional information on ABI, visit www.abiworld.org. For additional conference information, visit http://www.abiworld.org/conferences.html.