14 Kentucky Counties Sue Mortgage Electronic Registration Systems (MERS) Over Mortgage-Recording Fees

14 Kentucky counties sue over mortgage-recording fee

A mortgage-recording service and financial institutions have schemed to avoid paying Kentucky counties millions of dollars in fees, 14 counties contend in a federal lawsuit.

In addition to depriving the counties of money, the conspiracy has shortchanged a fund used to make grants and loans for low-income housing, the lawsuit says.

The counties involved in the lawsuit are Boyd, Breathitt, Carter, Christian, Clark, Floyd, Franklin, Greenup, Johnson, Letcher, Magoffin, Mason, Pike and Warren.

They are suing Mortgage Electronic Registration System, or MERS, a company that operates an electronic clearinghouse for mortgage interests among members, and related business entities, shareholder companies and financial institutions.

The lawsuit lists two dozen defendants, including the U.S. government-sponsored lenders Freddie Mac and Fannie Mae.

The complaint says that under state law, when one company transfers or sells a mortgage to another, the company receiving the interest has to pay a recording fee at the county clerk’s office

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2 Responses to “14 Kentucky Counties Sue Mortgage Electronic Registration Systems (MERS) Over Mortgage-Recording Fees”
  1. talktotennessee says:

    Suing MERS will gain momentum as more municipalities and counties have the courage to tackle the banks and get on board. Losing legal standing opens the way for homeowners to take MERS out as trustee, beneficiary in their notes. The next step is to develop a homeowners class action that could effectively remove MERS authority to foreclose in the courts. Destruction of MERS would destroy bank authority to foreclose. Even now big lenders are anticipating this problem by avoiding formal foreclosure. They offer defaulting homeowners a few dollars to give up ‘deed-in-lieu-of,’ list their houses for a short sale. Owners continue to take care of the property until the short sale is effected. Excessive value is lost in this method, more than principal reduction. It devalues normal sales, destroys tax base, but banks seem not want to take the moral high ground and help homeowners keep homes.
    Watch Frontline’s program. Even a slick coating of innocence gets across the enormous problem the banks are dealing with in who owns or has authority to foreclose. MERS is a construct established by banks to stand in the doorway. If MERS is exposed for the illegal entity it is, banks would be forced to make an effort to work out loans or forfeit collateralized support for their credit derivative products. Losing collateral means losing the right to foreclose. Frankly, homeowners need that leverage to stabilize the housing market..
    When laws are violated? Courts see that the guilty (banks) forfeit freedom, money, property, goods, etc? Is it right to punish homeowners for banks’ wrongdoing? Why reward banks for bogus loans, prepay penalties, ARMs, extravagant fees not to mention gutting the global market so people who never defaulted lose their equity, down payments, equity, forced to walk away from an underwater loan through no fault of their own!
    Our battle isn’t over. Down with MERS!!!

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