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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