Notice to Association of Mortgage

Governing documents are always written to favor the developer at first, and while some of the information is useful, some of it becomes outdated or unnecessary once the homeowners take over. The problem is the developers rarely review the documents with the soon to be HOA board members as to what’s in them, the new board members aren’t educated on why this could be critical if a homeowner falls behind in paying assessments and of course NO ONE reads all those papers shoved in your face at closing (admit it, you didn’t either). Instead they sign and initial, and then move in.

What happens if the bylaws aren’t followed? That may depend on which one it is and what’s at stake. You said you might get pushback if the board asked for this information, but try asking for it anyway, citing the bylaw and explaining how it would be used. You don’t need to know the amount of the mortgage or what they pay every month, just the name and address of the bank. If there’s enough howling, the homeowners can always vote to amend that part of the bylaws – keep reading them to see how that’s done and then talk to your association attorney about the pros and cons before you proceed.

Do you know if the developer is still around? If so, you might want to start there, although the information has probably changed, with mortgages being bundled up and sold in one shot to this or that bank. That was part of the drama from the 2008 housing crisis – no one knew who actually owned the house.

There are some property managers on this website who might know the answer (RichardP13, I’m looking at you!) but in the meantime, the only thing I can think of is checking the addresses against the database of your county recorder’s office. The mortgage company or bank should be listed there (at least the name of the original) and then you can recheck it every year to see if something’s change. I’d also go ahead and ask the homeowners – you don’t need to know the amount of the mortgage or what they pay every month, but a name and address would be a start. There may also be information in the county tax assessor’s office.

If the home is a single family detached unit and the owner pays the insurance, not the HOA, the insurance company could care less about the HOA. If Board members don't take the time to read their covenants, why should anyone expect the owner to?

What business is it of the association who does their business with what bank? BTW this information may be listed on the county recorders page. The only time you would need this information is if you were intending to foreclose. Some jurisdictions, even though HOA's in some instances are super priority must notify the bank first.

Richard is correct on this one.

You don't have access to MERS. A mortgagee isn't coming to you for information that is only accessible via MERS.

In it's heyday, MERS mortgages accounted to more than half the US mortgages issued. MERS was popular because it offered cheaper registration costs than normal registrations in county Registries of Deeds throughout the country. In my state, several counties sued MERS for violating public registration requirements (and undercutting county revenues). The counties won. A few years later, those cases were overturned by an appellate court. Hmm, wonder who made big bucks on that one. Anyway ...

Today, MERS is owned by the same holding company that owns the New York Stock Exchange. So like Richard said, no mortgagee is coming to you when the best and often only source is MERS.

As far as the specific language in your docs is concerned, I don't see any real obligation on the BOD. If the HOA had such records, providing them to the mortgagee appears to be optional. (The word "may" is used twice.) While there is an obligation on the owner to provide the information to you, that's on the owner, not the BOD. Your BOD has an obligation to maintain a book of all mortgage information provided by the owners. If your owners don't provide that info to the BOD, then I see nothing wrong with a book that's blank. There's nothing in your wording that says your book can't be blank.

So - from both a practical standpoint and a technical standpoint, you can probably ignore this issue.

Differences: MERS is a private entity with no responsibility to the public. DMV is a government entity.

Thanks for info re access to MERS. Just checked it out. Identifies the holder but not the dollars. So not sure how that could be valuable to an HOA. Even when we reached out to a mortgage holder via our attorney, they weren't resonsive.

Thanks for proving my point. If registration was with a government agency - the Registry of Deeds - the amount of the mortgage would be publicly recorded and available to anyone. It's only been that way for hundreds of years.

So when you said that MERS was accessible, what you meant is that it is accessible - not to the public - but to people who work within the industry and have paid access. Big WOW back to ya.

Closed world. Closed mind.

Hi Richard.

As I said earlier, I use sale prices and mortgage amounts as part of a spreadsheet analysis on the vulnerability of my HOA to another RE market drop. You challenged me on that. Then you challenged me on a 2011 report from CAI that I attached about the effect of the mortgage meltdown on HOAs. Then you said that you used MERS which you said was accessible to the public. I thought - great - if Richard has a better approach, I'm interested. So I looked at MERS, but didn't get past the opening screen because I don't have a MERS account. So you challenged me on being to cheap to pay for the service. That's an awful lot of challenges Richard without ever demonstrating that you've got something better.

I'm sure that you know how to dig deep into the status of an individual account. That's fine. You use your skills when you're trying to collect from an individual account.

But it has nothing to do with the analysis I do for my HOA. I don't look at one account. I look at vulnerabilities across the board, which takes every unit into consideration, but doesn't dig deep into the detail of any one account. It would be a waste of time considering my objective. If we had current collections issue - maybe what you do would be valuable - but we don't.

As far as MERS is concerned, I've had only one experience. We paid a lawyer hundreds of dollars to reach out to the owner of a MERS mortgage in order to get some action on a house that sat unoccupied for 6 years. Working on it. Working on it. But just as we thought we had a deal put together, the bank that held the mortgage sold the paper. We decided not to waste any more money chasing the new owner - who would probably do the same to us.

Closed world. Closed mind.

I'm done with this topic.

Back in the MERS heyday of mortgage generation, any yahoo from a Bank could become an officer of MERS for a few bucks - and then - as a MERS "officer" - could generate a mortgage in the name of MERS. The only name visible to the public was MERS. If you went to a county recorder of deeds, the name on the mortgage was MERS. If you say that's not a "MERS mortgage" - ok - you can call it whatever you want.


I figured that's what you were doing and I acknowledged it in my last post. You help collect. Got it. I'm sure you do a great job for your clients. Then again, just because you don't do predictive analysis as part of your job, that's not a reason to find fault with what I do.

Best.

The following is an excerpt from the KY attorney general's office website page on MERS. KY was the first state to come up on my google search, but it wouldn't be difficult to find others.

As KY says: 1. MERS is the nominee (named party) on the mortgage; and 2. MERS used "Signing Officers" who are not actually officers of MERS, but are instead "designated officers" who really work

Best.for independent MERS members or some 3rd party agent of a MERS member.

If you compare this to what I wrote - surprise, surprise - it matches up.

In other words, calling what I wrote "garbage" doesn't make it untrue.

Statement Regarding Mortgage Electronic Registration Systems, Inc. (“MERS”)
There are certain instruments, including Mortgages, which are recorded in the public land records identifying Mortgage Electronic Registration Systems, Inc. (“MERS”) as the nominee of the lender and the lender’s successors and assigns. MERS is the lienholder of record and holds legal title to the lien granted by the borrower in the Mortgage (“MERS Mortgage”) as the nominee (agent) of the lender and the lender’s successors and assigns who are members of the MERS® System.
As the mortgagee, MERS performs many of its actions, such as assignments of your mortgage, through individuals who are known as MERS Signing Officers and who may be designated as an officer of MERS on mortgage documents. Despite this designation, MERS Signing Officers are typically employees of the lenders, servicers, or other companies that are members of MERS, or employees of third-party agents of the members.

Holy Sh$t is all I can say. I supposed having the ability to do a search on a topic you have no knowledge makes you a world expert. Kinda like the bozo occupying 1600 Pennsylvania Ave, when he's not out playing golf.