Loans are assigned to MERS so when a loan is sold from one entity to another the transfers do not have to be registered at your local gov’t office.
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At least that’s what MERS assumed ,, that they could ignore recording laws and BS the courts into believing that their non-conforming unrecorded assignments are worth more than toilet paper.
You make a good point. The whole issue is if MERS assignments are as you say the whole mortgage market would collapse.