Meet MERS: Another Real Estate Time Bomb? The corporation says it holds title to 50% of America's home mortgages By Kate Seamons, Newser Staff Posted Mar 5, 2011 5:06 PM CST 7 comments Comments This Wednesday, Feb. 23, 2011 picture shows a foreclosed house for sale in the Detroit suburb of Southfield, Mich. Many in the black middle class moved out of Detroit and settled in the northern suburbs... (AP Photo/Carlos Osorio) (Newser) – If you thought America's real estate mess couldn't get any messier, brace yourself—and meet the MERS corporation. If you haven't heard of it, you're not alone. The obscure business, housed in Reston, Va., employs fewer than 50 full-time workers ... and claims to hold title to about 50% of the country's home mortgages. That's 60 million loans. Founded in 1995 by Fannie Mae, Freddie Mac, and big banks, MERS essentially replaced the nation's centuries-old handwritten system of land records. Gone were the county clerks and in was a privatized, streamlined system that made securitization—bundling loans and selling said debt to investors—cheaper and easier. No matter how many times the loans are transferred, MERS remains the owner of record, despite not having invested a dollar in a single loan—and, depending on how things play out, MERS could deal another blow to the real estate market. Asks the New York Times, "Given the evidence that many banks have cut corners and made colossal foreclosure mistakes, does anyone know who owns what or owes what to whom anymore?" The Times lists some recent headaches and legal challenges: In 2010 the Arkansas Supreme Court ruled MERS could no longer file foreclosure proceedings there, because it does not actually make or service any loans. In February, a Utah judge let a homeowner tear up his mortgage that MERS claimed ownership of, and walk away debt-free; the judge did not recognize MERS' legal standing. Writes the Times, "In August, the Ohio secretary of state referred to federal prosecutors in Cleveland accusations that notaries deputized by MERS were signing hundreds of documents without any personal knowledge of them." Federal bankruptcy courts discovered that, in thousands of cases, MERS and its member banks lost or mistakenly destroyed loan documents. Click to read the entire story.