Schneiderman Sues Three Big Banks, MERS for Deceptive Practices, Illegal Foreclosures [View all]

[phantom power]

This is also a total attack on MERS. The suit alleges (according to this release) that MERS was created specifically to allow banks to skirt county recording fees on their voluminous mortgage transfers. And it explains how MERS operates outside the law by becoming the “nominal” mortgagee of the loans on its database for public records, and how it allows 20,000 “certifying officers” – in a company of 70 employees – to act on its behalf in foreclosure executions and other filings. This has been a sewer from the beginning, and I don’t see how you fix this crisis without completely and totally disbanding MERS.

I like this part from the release:

MERS’ conduct, as well as the servicers’ use of the MERS System, has resulted in the filing of improper New York foreclosure proceedings, undermined the integrity of the judicial process, created confusion and uncertainty concerning property ownership interests, and potentially clouded titles on properties throughout the State of New York. In fact, several New York judges have questioned the standing of the foreclosing party in cases involving MERS loans and the validity of mortgage assignments executed by MERS certifying officers.

The lawsuit cites 13,000 different instances of MERS listing itself as the plaintiff in foreclosure cases when they lacked the legal standing to foreclose. And it cites countless other cases where the MERS “certifying officers” submitted foreclosure documents to state courts with legal defects and misrepresentations. “MERS’ indiscriminate use of non-employee ‘certifying officers’ to execute vital legal documents has confused, misled, and deceived homeowners and the courts and made it difficult to ascertain whether a party actually has the right to foreclose,” says the release. This is a big deal.

Schneiderman seeks injunctive relief as well as damages for homeowners harmed by MERS, which reaches into the thousands of New York State. And then there’s this curious line: “The lawsuit also seeks a court order requiring defendants to take all actions necessary to cure any title defects and clear any improper liens resulting from their fraudulent and deceptive acts and practices.” I don’t know how that gets done; perhaps this is the “equitable mortgage” process whereby new title is created through a massive write-down of the unsecured debt.

http://news.firedoglake.com/2012/02/03/schneiderman-sues-three-big-banks-mers-for-deceptive-practices-illegal-foreclosures/