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In a move illustrating the worst type of political manipulation, banking lobbyists attempted to slide an amendment validating the mortgage industry’s massive failings into a pro-homeowner bill yesterday. Although the amendment was not adopted, a final decision will be made when the bill is taken up again by the House Judiciary Committee on Tuesday.

The amendment proposed would have essentially stripped the long standing state requirements to record title transfers in county records, and let the banking industry move forward with a landslide of questionable MERS foreclosures. The amendment was attached to SB 519 - legislation that would actually help preserve affordable housing in the wake of the foreclosure crisis, not make it easier for banks to take away properties as the amendment aims to do.

The Mortgage Electronic Registration System is the industry-created workaround for recording property sales through local governments. By creating this problem-riddled process, MERS has cost Oregon millions of dollars in lost recordation revenues and led to massive discrepancies in the chain of title process. As a result, people losing their homes have no way to know whom to negotiate with.

Another blow to the validity of MERS came in the form of a federal judge’s decision this week on an Oregon property he deemed was improperly sent into foreclosure because of the many flaws in the MERS process. The case was chronicled in a front-page article in today’s Oregonian and drew national attention in the Wall Street Journal. In his decision, Judge Owen Panner said “MERS makes it much more difficult for all parties to discover who ‘owns’ the loan. When a borrower on the verge of default cannot find out who has the authority to modify the loan, a modification or a short sale, even if beneficial to both the borrower and the beneficiary, cannot occur.”

The attempt by Oregon financial industry insiders to codify the MERS process to deal with the housing crisis serves only to cover one mess they created with another. Standing up against this move is not a partisan issue – in fact, one of the strongest voices against the proliferation of MERS is Republican Representative Dennis Richardson.

One in every four housing sales is a foreclosure – a family that has lost their home. Instead of trying to lower this statistic, the industry is working to drive it even higher by pushing through fraudulent foreclosures. This is simply an issue of those who spell principle with an ‘le’ and those who spell it with an ‘al’.

The attempt by Oregon financial industry insiders to codify the MERS process to deal with the housing crisis serves only to cover one mess they created with another. To let your legislator know you oppose the banking lobby's amendment but support SB 519, please call or e-mail them today.