A company called Mortgage Electronic Registration Systems, or MERS, began electronically storing loan documents for most big lenders. MERS works as a clearinghouse, keeping track of who owns U.S. mortgages and who has the right to "service" them, collecting the payments.
Most lenders don't actually have copies of title and mortgage documents anymore. And now in many cases, county title records no longer show who is entitled to receive a home as collateral.
For $300, Deal spent five to 10 hours researching all of the public property records on Christensen's Gilbert home.
He looked at her original deed-of-trust documents. He checked for liens and changes to her home's title. Several documents were missing and others were missing information or filed incorrectly.
"I found multiple errors in her title," Deal said. "Arizona's land laws are very straightforward, and when lenders start assigning different rights to a property's title as part of a mortgage, they have to follow the laws."
It was obvious from Deal's audit that it wasn't clear who held title to Christensen's home.
For her, the finding was ammunition. She would be able to argue in court that lenders hadn't followed the rules in laying claim to her house.
But it was hardly a solution.
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