31 October 2012

Pass the Popcorn

A court has ruled that the Montgomery County (PA) Recorder of Deeds can sue MERS (Mortgage Electronic Registration Systems) and the banks over their evading recording fees:

The federal court has upheld the Montgomery County Recorder of Deeds’ right to sue an electronic mortgage registry company and banks doing business with that company for $15.7 million that she claims is owed to the county in recording fees.

The court Friday issued a 36-page memorandum and order denying a motion by MERS, also known as Mortgage Electronic Registry System, and its participating banks to dismiss the lawsuit filed last year by Recorder of Deeds Nancy J. Becker.

The court’s ruling, while not discussing the merits of the case, essentially states that Pennsylvania does have a law requiring that mortgage assignments be recorded with the recorder of deeds office and that the recorder of deeds has the right to bring legal action when he or she does not believe an entity is complying with the law.

“This is one major hurdle that we have now leaped,” Becker said Monday. “Now, we can move forward on the issues.”


Some 146,715 MERS mortgages have been recorded in her office from April 2004 through September 2011, according to Becker.

146,715 mortgages?  In one county?

Well Montgomery County has about 800K people, or about ¼% of the US population.

If you assume a lower number of multi-family residences, and double it, you have something in the neighborhood of 30 million mortgages, and fee evasion on the order of $3 billion.

With penalties, it might be north of $10 billion, and when you consider the potential liabilities that the banksters might have incurred because MERS did not work, and does not provide an accurate (or for that matter legal) record of who holds the note on the loan:
Becker has said that, when these mortgage loans are transferred electronically, sometimes multiple times, through MERS and not filed in the county recorder of deeds office, “it makes it difficult, almost impossible sometimes” for property owners to determine what institutions are holding their mortgages.
I would be very surprised if the liabilities incurred by this are not hundreds, if not thousands, of times more.


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