Securitizing mortgages is not much different from "securitizing" partial "ownership" of "public" (in UK they call them "listed") companies on the stock exchanges - stocks give the owners of shares certain rights in proportion with their percentage of accumulated shares, or the corporate bonds which give their owners certain rights on the interest income as well as proportional "liens" on the assets of the company if it fails to pay such interest.
Neither stock shares' nor bonds' ownership gives the right to the "title" of the company or mortgage - it stays with the company or mortgagee, unless or until the company / title to the property is sold. It's almost a direct equivalent between fractional ownership of company stock / bond pool or mortgage - "title" ownership is not affected / changed / recorded until it's sold.
Essentially, MERS is a first electronic "mortgage exchange" in the same way NASDAQ was the first electronic stock exchange) - facilitating faster and better fractional "rights" to the flow of income (or loss) from particular asset class (mortgages, stocks, credit card interest etc.) and there were similar attempts to demonize / "discredit" the NASDAQ by its competitors NYSE and other exchanges because NASDAQ "didn't have people on the floor" who would catch "fat finger" and other mistakes that humans supposedly would take care of. Some 30+ years later and it's hard to find people on the "floor" of any sizable exchange because there are things that computers do much faster, better and more accurate, with fewer mistakes (e.g., databases and transaction processing).
MERS deals with real, already existing assets and market, not fictional, ephemeral, made up CO2 / carbon credits that CCX has been involved in.
It's not surprising that politicians who created the mortgage mess by requiring "politically correct" loans (CRA) from mortgage industry and executing the policy through FHA, VA and GSEs Fannie / Freddie, and their lap dogs in the al-media (WaPo and NYT et al) would find another "evil" organization responsible for all the problems and consequences of their own policies.
From New Ad Ties Barney Frank to Fannie & Freddie - FR, post #33 by CutePuppy:
< snip > ..... In fact, contrary to the message of the film, securitization and the associated use of that now-anathematized investment instrument, derivatives, can be beneficial. For example, the activity of securitizing credit-card debt has been functioning for decades. Much depends on the underlying assets on which the derivatives and securities are based. When they are subprime mortgages, you just might have a problem. Barney Frank has left a long trail as an aggressive supporter of the government-sponsored enterprises Fannie Mae and Freddie Mac, financial institutions that did not originate mortgages, but only bought them in the secondary market. The basic nature of the GSEs' business was therefore securitization, and increasingly of the subprime kind, which Frank extolled. According to a front-page story in the Boston Globe, run the day before the Globe critic posted his rave of Inside Job, Congressman Frank actively opposed initiatives in 2003 and '04 to rein in Fannie and Freddie through tighter regulation ("Stance on Fannie and Freddie Dogs Frank," Oct. 14). "He and other House Democrats," reported the Globe, "also sent a letter to President George W. Bush in June 2004, saying the proposed crackdown could 'weaken affordable housing performance by emphasizing only safety and soundness.' ..... < snip > Movie Review: Inside Job - Misdirected Outrage - B, by Gene Epstein, 2010 October 23
MERS is not the "evil that lurks in the shadows" that unscrupulous politicians portray it trying to find any and every "problem" with "politically correct" mortgage fiasco that they can find, to diver attention from their role in it. It's actually a natural application of [computer] technology to the process of "securitization" - fractional ownership of assets - which provides the necessary liquidity to different potentially income-producing asset classes, and which has been done without being computerized long before that.
Happy New Year, everyone!
That was the intent, and it's all well and good if it was done right, but that doesn't appear to be the case. MERS was overwhelmed by the sheer number of transactions, in violation of many existing state recording laws, and provided support for robo-signed foreclosure affadavits that were inaccurate.