Foreclosure Consequences - Consequences of Foreclosure

Foreclosure Consequences - MERS

When researching foreclosure consequences, be sure to check to see if your mortgage was registered with Mortgage Electronic Registration Systems, Inc (MERS). During the housing boom, banks hastily approved loans without the appropriate filing through the MERS system. MERS issues the promissory note, which is the legal agreement between you and your financing institution.

In a June 13, 2011 foreclosure consequences article, a New York Appelate Court of Appeals ruled that MERS does not have the right to foreclose on a mortgage in default or assign that right to anyone else if it does not hold the underlying promissory note.

This news is HUGE, especially for those who are trying to understand the consequences of foreclosure! The bank needs to be in possession of both the promissory note and the deed. Many banks have sold their promissory notes to many different companies.

To make an analogy, think of your promissory note as a loaf of bread. Each slice has been sold to other companies who are, essentially, betting that you'll default. In other words, the whole process is a scam perpetrated by the banksters.

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