County of Montgomery Recorder v. MERSCorp Inc, et al | Brief Of Amicus Curiae The Legal Services Center of Harvard Law School And Law Professors in Support of The Appellee

UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT _________________________________________ No. 14-4315 _________________________________________ MONTGOMERY COUNTY, PENNSYLVANIA, RECORDER OF DEEDS, by and through NANCY J. BECKER, in her official capacity as the Recorder of Deeds of Montgomery County, Pennsylvania, Plaintiff-Appellee, v. MERSCORP, INC., and MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC. Defendants-Appellants. _________________________________________ Appeal from the July 11, 2014 decision of the United States District Court for the Eastern District of Pennsylvania Civil Action No. 11-CV-06968 (Honorable Curtis Joyner) certified for interlocutory appeal on September 8, 2014 _________________________________________

BRIEF OF AMICUS CURIAE THE LEGAL SERVICES CENTER OF HARVARD LAW SCHOOL AND LAW PROFESSORS IN SUPPORT OF THE APPELLEE

_________________________________________ MAX WEINSTEIN CHARLES CARRIERE K-SUE PARK LEGAL SERVICES CENTER OF HARVARD LAW SCHOOL 120 Boylston Street Jamaica Plain, MA (617) 390-2694

CORPORATE DISCLOSURE STATEMENT The Legal Services Center is a program of Harvard Law School at Harvard University, a 501(c)(3) non-profit organization. No party, party’s counsel, nor any person other than the amicus curiae authored any part of the brief, nor contributed money intended to fund preparing or submitting the brief.

TABLE OF CONTENTS STATEMENT OF INTEREST………………………………………………........... 1 ISSUE TO BE ADDRESSED………………………………………………………. 1 SUMMARY OF ARGUMENT…………………………………………………….. 1 ARGUMENT………………………………………………...................................... 4 I. MERS is a departure from and disruption of the traditional recording practices, upon which it relies…………………………............................. 4 A. Prior to MERS, records of real property interests were public, transparent, and provided a secure foundation upon which the American economy could grow……………………………………. 4 B. MERS was created to reduce costs for sellers of mortgage-backed securities (MBS)………………………………………................... 6 C. The MERS structure substitutes the MERS name for that of the mortgage lender in the county registry……………………............. 8 D. MERS privatized and made the documentation of transfers of mortgage notes optional, discouraging the mortgage industry from maintaining complete records of actual holders of interests in real property……………………………………….................................. 10 E. MERS interferes with Pennsylvania’s requirement that purported assignees prove their relationship to the original lender in order to foreclose……………………………………………………………. 12 F. MERS lacks legal authority and public accountability…................. 12 G. MERS acts as a placeholder in the traditional recording system, and cannot function without that system ……………………......... 17 II. MERS helped precipitate the foreclosure crisis and left homeowners without recourse to protect their property rights……………………………... 18 A. MERS facilitated the securitization of subprime loans…………….. 18 B. MERS increased the costs of enforcing property rights and left homeowners without recourse to challenge wrongful foreclosures....................................................................................... 21 C. Surveys, audits and public media have exposed the inaccuracy of records in the MERS database……………………………………... 22 D. Court proceedings and federal agency investigations have exposed the inaccuracy of records in the MERS database………..…………. 24 E. MERS’s inaccuracy affects not only the properties for which it is named as mortgagee, but all properties adjoining those properties…………………………………………………………… 26

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