The mortgage securitization industry has just had a new major front open on its battle with those who are less than happy with the way it has run roughshod over the law. While there are a significant number of court rulings questioning foreclosures in the name of MERS or other practices commonly associated with the use of MERS (for instance, in Oregon, its violation of recording requirements mandated at the state level), no major regulator or public official (beyond county registers of deeds) has gone after MERS in a serious way (New York’s AG has opened an investigation, but it has not led to any litigation).
This has changed with the Delaware attorney general Beau Biden’s filing. The suit takes the interesting angle of pursuing MERS for engaging in deceptive consumer practices. Nevada’s attorney general has also used the deceptive practices argument in suing Countrywide for violation of HAMP procedures.
The damages sought are substantial, $10,000 per violation. Since MERS is a tiny company, with under 50 employees and many of its operations outsourced (and no reason for it to maintain a substantial balance sheet), success in court would almost certainly mean bankruptcy for MERS. In theory, a new consortium or private investors could buy the database out of bankruptcy, but how would one structure its operations so as to not run afoul of the law? Yet with so many mortgages recorded in the MERS database (the registry has claimed over 60 million) the banks will need to find a way to keep it going and operate it in an above-board manner.
I’ve not yet seen the claim, but DelawareOnline gives an overview of the case:
1 comment:
Is one of the Bidens up for reelection AGAIN?
Let's keep reminding ourselves how he protected our children against the Lewes Pedophile pediatrician for so many years before we get excited about some bull about protecting us from off the wall "electronic measuring system".
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