The equity purchaser must confirm that the equity seller has the reasonable ability to buy back the property and the deed must recite that the property is subject to reconveyance and the terms of the reconveyance arrangement.
12.
Ideally, assuming a loan is properly paid back on time, a MERS loan needs only two documents to be recorded : the original mortgage or deed of trust naming Mortgage Electronic Registration Systems, Inc ., and a reconveyance of the mortgage or deed of trust back to the borrower ( thus merging legal and equitable title ).
13.
This was the "'mortgage by conveyance "'( aka " mortgage in fee " ) or, when written, the "'mortgage by charter and reconveyance "'and took the form of a feoffment, estate, but was in fact conditional, and would be of no effect if certain conditions were met.
14.
A reconveyance arrangement has two elements : ( i ) A sale, mortgage, lien, encumbrance or any other method which allows an equity purchaser to obtain legal or equitable title to all or part of the property; and ( ii ) Some agreement or promise to the equity seller that he / she can regain ownership of the property ( e . g ., the purchase agreement, option to purchase, lease, etc .)
15.
"Draft reconveyance of mortgage made between Francis Armstrong, esquire, of the first part, Reverend Thomas Crawford, clerk, Rector of Drumcliffe, County Sligo, and Anne Crawford otherwise Armstrong, his wife, of the second part, [ Adan ] Crawford, Cockspin Street, Middlesex, esquire, medical doctor, and George Kenny Sawtell, John Street, Bedford Row, London, gentleman, of the third part, Thomas Slack, esquire, and Susanna Slack, his wife, Marshwood, Newtowngore, County Cavan, of the fourth part, and John Ouseley Bansale, 1 Eldon terrace, South Circular Road, City of Dublin, esquire, and Arthur John Vesey Lindsay Birchall, esquire, Blackrock, County Leitrim, esquire, of the fifth part.
16.
If all entities along the way are MERSCORP Holdings, Inc . members, then all intermediate transfers between those points are tracked only on the MERS system, and the entity who holds the loan at the end merely records the reconveyance as an agent for MERSCORP Holdings, Inc . ( Notice how MERS is " both " ( 1 ) an agent for the original lender, and then ( 2 ) the final lender acts as an agent for MERSCORP Holdings, Inc .; this is why MERS'critics frequently attack it as " two-faced . " ) If the borrower defaults, the loan servicer will record an assignment on behalf of Mortgage Electronic Registration Systems, Inc . to the real party in interest ( i . e ., an investment bank in its capacity as trustee for a MBS ) and initiate foreclosure.
