At its most basic, MERS is a computer registry for trading loans. You have heard of securitization of mortgages and how that led to the current crisis? MERS is at the heart of that.
The NY Times recently wrote about MERS. Here is their description of MERS:
Created by lenders seeking to save millions of dollars on paperwork and public recording fees every time a loan changes hands, MERS is a confidential computer registry for trading mortgage loans. From an office in the Washington suburbs, it played an integral, if unsung, role in the proliferation of mortgage-backed securities that fueled the housing boom. But with the collapse of the housing market, the name of MERS has been popping up on foreclosure notices and on court dockets across the country, raising many questions about the way this controversial but legal process obscures the tortuous paths of mortgage ownership.
I am not a conspiracy theorist. I do not run around thinking that the sky is falling. But I litigate enough cases against MERS to understand that MERS is part of the problem. It is almost impossible to track down the owners of any specific property because MERS refuses to release that information. It is time for some change to the system.