Fannie and MERS

Abigail Field website:

Fannie Mae has a lot of responsibility for our current foreclosure and mortgage crisis, although it has not been reported on much. That’s changing.

Last weekend, the Detroit Free Press reported that Fannie’s pushing foreclosures in violation of its own rules. In the Free Press article Fannie Mae, unsurprisingly, denies the charges. When I contacted Fannie Mae spokeswoman Amy Bonitatibus, she wouldn’t discuss the Free Press article on the record. However she was willing to confirm Fannie Mae’s well known role in launching MERS. And perhaps Fannie Mae’s most far-reaching foreclosure and mortgage mess impacts stem from MERS.

Fannie Mae and MERS

Fannie Mae was instrumental in the creation and legitimation of MERS, the mortgage registration “system” that has wreaked massive damage to our property records and land titles (at pg. 1370). Fannie Mae was a founding MERS member and initially one of only two entities that used MERS. The other was Freddie Mac. After a few years, the private securitization market started using MERS mortgages. But helping midwife MERS and legitimize its use are not Fannie Mae’s only contributions to the MERS mess.

Fannie Mae’s current servicing guidelines prop up fictions about MERS, like a co-conspirator helping to corroborate a cover story. For example, Fannie Mae’s guidelines talk of MERS as if it was a single, coherent company, reinforcing a false image of MERS.

“Fannie Mae notifies MERS…”, (p. 104-30, second paragraph)

“In addition, MERS’ failure to perform any obligation…” (p. 104-30 last paragraph)

“(MERS will notify Fannie Mae…” (page 104-31, Section 408.1)