Monday, September 26, 2011

One county has figured out the MERS scam

And all the others will probably soon follow. For years all the major players in the mortgage market have been using MERS as the owner of record as they passed mortgages back and forth between them. By having each bank declare one or more employees as officers on MERS, they could claim each transfer was "internal". This allowed them to bypass recording fees and transfer taxes. This has now pissed of Dallas county.
Bank of America Corp. is among a group of lenders that may face a wave of new lawsuits claiming cash-strapped counties were cheated out of millions of dollars by a system used for more than a decade to register mortgages.

Dallas County District Attorney Craig Watkins said state attorneys general and county officials across the U.S. have expressed interest in his lawsuit against Mortgage Electronic Registration Systems Inc. and Bank of America, filed in Texas state court on Sept. 21. Dallas County could be owed as much as $100 million in filing fees, he said.

MERS, a unit of Reston, Virginia-based Merscorp Inc., says on its website that its aim is to place every mortgage in the country on an electronic, rather than a paper, system that allows members to buy and sell mortgages.

MERS acts as the lender’s nominee and remains the mortgagee of record as long as the note promising repayment is owned by a MERS member. Dallas County claims this allows banks to buy and sell loans without properly recording transfers with counties and paying the fee.
The ownership of MERS covers all the big mortgage players. An adverse judgement could well refund many of the counties now so desperate for cash.

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