The future of foreclosures in Oregon now rests in the hands of the state Supreme Court. The high court this week heard arguments on a pair of cases involving the Mortgage Electronic Registration Systems, created by lenders to streamline the bundling, buying and selling of mortgages.
If the court rules against MERS and says the lending industry's shortcut violates state law, it could add considerable time and expense to the out-of-court foreclosure system banks have used almost exclusively in Oregon for decades. That could send more foreclosures to the courts -- or give banks more financial incentive to avoid foreclosure by working with homeowners and considering other alternatives.
At issue in both cases Tuesday -- which were so similar the arguments for the case heard in the afternoon were virtually a continuation of those earlier in the day -- is whether MERS can stand in for the lender in a foreclosure outside the court system.