New Front In The Foreclosure Fraud Fight - FDL/Bloomberg

[WillyT]

Dallas County Sues MERS for Unpaid Recording Fees
By: David Dayen - FDL
Friday September 23, 2011 12:16 pm

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The more interesting foreclosure fraud action at the state level are things like this: http://www.bloomberg.com/news/2011-09-22/bank-of-america-filing-fee-case-may-open-new-front-in-mortgage-lawsuits.html

Bank of America Corp. (BAC) 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.

“This is a big new front,” said Christopher L. Peterson, associate dean and professor at the University of Utah S.J. Quinney College of Law. “This case is scary because if Dallas wins then there are a lot of other counties around the country that are going to follow.”

This is something I’ve been watching for a long time. The entire reason for MERS is to avoid filing fees with county recorder offices. If Dallas County alone is suing for $100 million (in fact, with penalties and late fees Peterson says that could be much bigger, closer to $1 billion), then the liability here nationwide is well into the tens of billions. And every county needs the money. You’re talking about avoided fees on multiple transfers of 60 million mortgages. And yes, this was MERS’ entire business model:

“According to MERS’s own website, its system saves money for its members and is specifically designed to avoid paying the fees” to county clerks, according to the April 25 filing. “MERS president, R.K. Arnold, testified in 2009 that assuming each mortgage has been resold and recorded just once, it would have saved the industry $2.4 billion in recording expenses.”

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Link: http://news.firedoglake.com/2011/09/23/dallas-county-sues-mers-for-unpaid-recording-fees/

:kick:

[truedelphi]

1. Kamela Harris, AG of California, please take note. n/t