Certain states — including California and Virginia — are contemplating changing their laws to require any company pursuing a foreclosure to recreate all the transfers and assignments of a loan, say real estate lawyers.

Such a change would negate Mers assignments and pave the way for states and local jurisdictions to collect millions of dollars in recording fees, according to Larry Platt, a partner at K&L Gates in Washington.

"They are arguing you must have recorded assignments showing intermediate assignments, that Mers doesn't show, as a condition to foreclose," Platt said at a recent Mortgage Bankers Association servicing conference.

"Many state legislatures are trying to jump on the foreclosure reform bandwagon. All kinds of ideas are being floated," said Donald Lampe, a lawyer at Womble Carlyle Sandridge & Rice in Charlotte, N.C. It is unclear whose ideas will be acted on, he said.

"It is difficult to redo the entire chain of title," Lampe said, noting that some previous assignees have gone out of business. "It is the type of proposal that could severally impair people's ability to foreclose."

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