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MERS IT operation visualized

Yves has a terrific post on MERS, the electronic registry system for mortgages, which, whether you're an IT person or not, you should read.* Because "troubling open questions about access control and an audit trail" is a very polite way of saying "riddled with fraud."

The post has a great visualization of the MERS process, too. But here's a simpler one:

Some clever class action lawyer for the homeowners, or some representative of the investors whom the banksters defrauded, or maybe counsel to an association of the localities whose fees were stolen, really does need to put yellow crime scene tape around MERS. Like, immediately. Lock MERS down before the perps wipe it, or the admins meet with "a terrible accident," or the CEO goes up in a small plane or flees to a country with which we have no extradition treaty. Kidding! Or maybe Bloomberg could. They were aggressive enough to FOIA the Fed, after all.

NOTE * And if you're a DISemployed IT person, ask yourself why you don't have a job, and the MERS tech people do. Was there something you just weren't willing to do? For example:

From [Richard Smith's] discussion of the electronic handshake:

I agree about the laxity: 1) if there is collusion outside the system, just about any set of transfers could be input and confirmed by two parties. Where is the dual-keying and management supervision? .... 2) There’s no indication of any reconciliation process, ie daily checking for transfers that don’t match and sorting out who made a mistake. It beggars belief that there wouldn’t be confirmation failures, with human beings on either side of the transaction.

Combine 1 & 2 and it’s easy to see how the physical legal reality and the electronic record might not agree. As the lawyer keeps emphasizing in his questions, there is nothing here which would make a chain of transfers evidentiary of anything, if it’s the paperwork that actually counts legally. It does seem to be just a (potentially shaky) electronic copy of the physical docs.

Other observations: the guy being interrogated seems like a low level operator who doesn’t necessarily understand the system too well (*update* after closer reading FUCK ME, he’s the CEO).

The full presentation Smith is summarizing.

NOTE Hat tip, commenter Cedric Regula. Oh, and Yves is Marge Gunderson.