Losing the Paper – Mortgage Assignments, Note Transfers and Consumer Protection

37 Pages Posted: 30 Oct 2012 Last revised: 7 Nov 2012

Date Written: October 29, 2012


In this article, I survey the state of the mortgage loan transfer system, the legal rules that govern it, and the widening gap between those rules and the practices in the secondary mortgage market just prior to the 2008 crisis. The review includes some empirical assessment of the extent of errors and execution problems; the damage done by “robo-signing;” the Mortgage Electronic Registration System (MERS) and note delivery practices; and the extent to which courts will prevent or reverse foreclosure sales based on those errors and problems. I then examine why existing legal structures, for both paper-based and electronic transfers, are not working, and the extent to which they have failed, I also identify the key consumer and investor protection values and interests (finality, transparency, fraud protection, and so forth) that must be addressed by the law governing secondary market transfers of home loans. I conclude by outlining options for reforming the mortgage loan transfer system, including the use of a single document merging the note and mortgage, and a structure for the registration of a single authoritative electronic version of the mortgage/note and of all changes in parties to, and terms of, the transaction.

Suggested Citation

White, Alan M., Losing the Paper – Mortgage Assignments, Note Transfers and Consumer Protection (October 29, 2012). Loyola Consumer Law Review, Vol. 24, No. 468, 2012, Available at SSRN: https://ssrn.com/abstract=2168189 or http://dx.doi.org/10.2139/ssrn.2168189

Alan M. White (Contact Author)

CUNY School of Law ( email )

2 Court Square
Long Island City, NY 11101
United States

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