Utah's "Quiet Title Law" Bypasses MERS, Awards Homes Free and Clear

[Joanne98]

The Salt Lake Tribune has an interesting article on Utah's "Quiet Title Laws", MERS, clouded titles, and record keeping. Several people won titles free and clear to their houses or condos when debts as great as $417,000 were dismissed in court. Here are a few snips.


A Utah court case in which the owner of a Draper townhouse got clear title to the property, even though he still owed $132,000 on it, raises new legal and financial questions about a property-records database created by mortgage bankers.

The award of a title free of liens means that whoever owns the promissory note on the Draper property — likely a group of faraway investors — no longer has the right to foreclose to collect on a delinquent loan. Indeed, the townhouse owner has sold the property and kept the money. Those who own the promissory note probably don’t even know what occurred.

Last year, the owner of the Draper property contacted attorney Walter T. Keane to help him deal with lenders, though Keane won’t say what the problem was and the owner declined an interview request.

http://globaleconomicanalysis.blogspot.com/2011/01/utahs-quiet-title-law-bypasses-mers.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+MishsGlobalEconomicTrendAnalysis+%28Mish%27s+Global+Economic+Trend+Analysis%29

[rbixby]

1. Wow, talk about a mess!

Granted, the way the banks did this was all wrong, but wow, this could definitely have a domino effect. Something definitely needs to be done to change this situation and make it so
1.Home buyers are protected from predatory lending
and
2.The banks making the loans need to hang onto them and ensure the correct paperwork is filed every time it changes hands
and
3.People don't borrow more money than they can afford to pay back


But yeah, wow, that's pretty amazing. It doesn't seem fair that someone just gets $400k in value free and clear by just not paying their mortgage, but at the same time its not their fault that the banks screwed up and made a loan that they couldn't legally collect on. Talk about a clusterfuck with no solution that works out well for anyone at the end of the day.