Homeowner advocates decry mortgage system

WASHINGTON, Dec. 3 (UPI) -- Confusion about who owns mortgage loans makes it difficult for homeowners to know with who they can negotiate a settlement, officials in Washington said.

That confusion raises questions about whether some banks have the legal standing to foreclose on a mortgage, a state judge and consumer attorneys testified before Congress, The Washington Post reported.

New York State Supreme Court Justice Dana Winslow said Thursday that "standing has become such a pervasive issue" in the cases he sees, "that I frequently use the term 'presumptive mortgagee'" to describe the entity trying to foreclose.

Winslow and others said the broader question concerns the legality of designating one company, Mortgage Electronic Registration Systems, as the mortgage holder, then trading loans to investors around the world without updating ownership documents in local clerk offices.

A University of Utah law professor said MERS has a "problematic legal foundation," and called MERS "deceptive."

"How is a homeowner to understand with whom they can negotiate a settlement, or from whom to obtain additional information, or how to distinguish a legitimate employee from the thousands of mortgage-related con artists and charlatans?" law professor Christopher L. Peterson asked.