From the March 2012 Press Release – Guilford County Sues To Clean Up Banks’ “Mess” at the Register of Deeds
Guilford County, ex rel. Jeff L. Thigpen, Guilford County Register of Deeds, filed suit today against LPS/DocX, MERSCORP, MERS, Inc., and numerous banks, loan servicers, and foreclosure specialists seeking to clean up the “mess” Defendants created in the County’s property records registry.
“Our office uncovered an abundance of falsified, forged, and fraudulently executed mortgage documents,” said Thigpen. “But our investigation only found the tip of the iceberg. We need the banks to clean up their mess.”
The suit cites as evidence, Thigpen’s identification of over 6,100 mortgage documents (4,519 of those by DocX) which were filed with the Register of Deeds and signed in the names of known robo-signer aliases: “Linda Green,” “Christie Baldwin,” “Pat Kingston,” “Korell Harp,” “Jessica Ohde,” “Rita Knowles,” “Linda Thoresen,” and “Brent Bagley.”
“How can we maintain accurate records of title with fraudulent documents? The banks are also maintaining their own private registry called ‘MERS’ that prevents the public from discovering who owns what loans. Because there is no accountability for MERS, its records are also a mess,” said Thigpen. “The system is broken and it needs to be fixed. We’re telling MERS and the banks: you broke it, you fix it.”
Original press release here…
From the latest Response to Motions to Dismiss:
Now, Guilford County Register of Deeds Responds to Motions to Dismiss by 5 Defendants in Guilford County v. Lender Processing Services (LPS) On April 16, 2012, this case was assigned to the North Carolina Business Court, and on May 14, 2012, most Defendants filed motions to dismiss. There are two primary motions to dismiss in this case. The first, filed by Defendants Lender Processing Services, Inc., DOCX, LLC, and LPS Default Solutions (referred to collectively as “LPS Defendants”), seeks dismissal on the grounds that Guilford County lacks Article III standing to assert any claim against them and fails to state claims for violations of N.C. Gen. Stat. §§ 45-36.9 (filing of satisfactions) and 75-1.1 (unfair and deceptive trade practices) and for unjust enrichment. The second, filed by a bevy of Defendants led by MERSCORP Holdings, Inc. (referred to collectively as “MERS Defendants”)2 seeks dismissal on similar grounds. The third and fourth, filed by Capital One3 and Green Tree,4 argue additionally that the Complaint contains insufficient allegations against them individually.
Importantly, none of Defendants’ motions to dismiss challenges Guilford County’s standing to obtain declaratory relief concerning the validity of documents filed in its Registry of Deeds or to obtain injunctive relief in the form of an order to correct invalid filings or to cease and desist from making invalid filings. Defendants’ motions to dismiss likewise make no argument that Guilford County is not entitled to declaratory or injunctive relief as a matter of law. Thus, the motions on file are, at best, partial motions to dismiss that cannot resolve the case in its entirety. Plaintiff Guilford County’s Memorandum of Law in Opposition to Defendants’ Motions to Dismiss seeks to address the arguments made in all five motions.
Defendants filed thousands of mortgage documents with the Guilford County Register of Deeds containing: (1) flagrantly forged signatures, (2) illegal notarizations, and (3) perjured and other false statements of fact. Defendants may attempt to disagree with this assertion, but in considering a motion to dismiss, the Court must take all allegations as true. Mangum v. Raleigh Bd. of Adjustment, 362 N.C. 640, 644, 669 S.E.2d 279, 283 (2008).
Defendants committed these acts through two practices: First, Defendants hired people to forge bank officers’ signatures in an assembly line fashion, disregarding all laws and regulations concerning the execution of documents and affidavits and the conduct of notaries public. Second, Defendants assign (or participated in the assignment of) mortgages to an inherently unreliable private registry run by Defendant Mortgage Electronic Registration Systems, Inc. (“MERS, Inc.” when referring the business entity and “MERS” when referring to the private registry), lose track of the note owner, and then have MERS, Inc. file a satisfaction of mortgage at the end of the process. In filing this satisfaction, MERS, Inc. has no idea whether or not the mortgage has been satisfied because MERS, Inc. admittedly does not own or service the note. Further, MERS, Inc.’s satisfaction is accomplished through forgery, illegitimate notarizations, perjury, and other false statements. Importantly, however, the Complaint does not depend on whether MERS, Inc.’s registry is legal or illegal. Irrespective of whether the registry is illegitimate, the MERS Defendants filed false documents with the Register of Deeds. The allegations regarding MERS, Inc.’s inherently unreliable system simply show that the MERS Defendants cannot possibly know whether anything they state regarding the mortgage is true.
As a result, Defendants have created a mess in the public land records of Guilford County. The Register of Deeds, who sought to create a model registry, now presides over a registry containing thousands of forged, false, and fabricated documents. The budget for the Register of Deeds does not provide the resources needed to clean up the mess or prevent further violations by Defendants, which continue to the present. This not only destroys the integrity of Guilford County’s public records, but also exposes the Register of Deeds individually to potential civil and criminal penalties and removal from office.
Defendants take the position that they can commit perjury, violate notary laws, and forge signatures with impunity, for they are seeking to tell this Court that the governmental body charged with maintaining a reliable, honest registry has no right to redress this assault on its fundamental duty. The unstated but unavoidable premise to their argument is they can file true records or they can file false records, and it does not matter which because nothing can be done about it. Their position, however, is contradicted by the Complaint, the law, and thousands of years of human history, which tells us that the integrity of public records is of vital importance and that it is the County itself that suffers when those public records are fabricated.
Full Response and original complaint below…