Reston-based company sued on fraud charges
Nevada law firm says Mortgage Electronic Registration Systems deprives counties of fees
A Nevada law firm has filed two civil lawsuits against Reston-based Mortgage Electronic Registration Systems alleging billions of dollars worth of fraud.
The suits, filed in Nevada and California district courts, claim the company has deprived county and state governments of revenue “used among other things to maintain county real property records, fund the judiciary, school systems and other government services.”
“They tout themselves as being a recording-fee avoidance scheme,” said attorney Robert R. Hager of Nevada law firm Hager & Hearne, which has filed the suits against MERS.
“If a loan is registered on the MERS system, it will save the financial institution involved in that loan from paying recording fees. MERS claims to have saved at least $2.4 billion in recording costs that would have otherwise gone to a county where the property is located. This system is depriving counties of fees legitimately owed them and contributing to the financial deficits that many local governments are currently experiencing,” he said.
MERS spokeswoman Karmela Lejarde on Friday called both suits “baseless” and pointed out that the attorney generals of both California and Nevada refused to accept them as false claims cases, essentially forcing Hager & Hearne to file civil suits.
“These same law firms have brought many other lawsuits against MERS and every one has failed,” she said. The MERS website further claims the MERS system is approved by Fannie Mae, Freddie Mac, Ginnie Mae, the Federal Housing Administration and Veterans Affairs, and the California and Utah housing finance agencies, as well as all of the major Wall Street rating agencies.
“The statement that any of our cases against MERS have failed is a lie,” Hager said. “It is true that we have other active cases involving them, but none have failed.”
According to its website, MERS “streamlines” the mortgage process for the mortgage banking industry by electronically registering mortgage loans for lending institutions. The company currently has about 2,500 clients or “members,” Lejarde said. The members list reads like a who’s who of the mortgage banking industry, including Bank of America, Countrywide Home Loans and Citimortgage, all three of which are named as co-defendants in the suits.
The MERS website also claims that since 1997, more than 63 million home mortgages have been registered on its system. “These include loans delivered to Fannie Mae, Freddie Mac, Ginnie Mae, all major conduits and state housing authorities,” the website states.
According to the company, once a loan is registered in its system, MERS acts as the mortgagee in all county land records for the lender and servicer, even though it does not actually own or lay any claim to any of the mortgages.
“Any loan registered on the MERS System is inoculated against future assignments,” the company website states, “because MERS remains the nominal mortgagee no matter how many times servicing is traded.”
The lawsuits claim this means that lenders are able to avoid recording fees every time individual mortgages are bought, traded and sold by banking institutions. As a byproduct, borrowers never know who actually holds their individual loans.
“Falsely recording MERS as the beneficiary on their deeds of trust creates an oversimplified, illusory and false chain of title that purports to justify payment of less money in recording fees; depriving the counties and the state from those fees …. [S]uch identification creates the illusion of a recorded chain of title whereby the actual creditors and/or loan beneficiaries remain hidden from public record,” the suits claim.
Filed under: foreclosure |
seem like things are about 50\50 some things are going mersway and some are not?
Pat the rat
my home is recorded at the county record that mers is the owserner of the note on my proprety whatcan i do to get the recorder straigth?
MERS is around for the big boys and they took all the money for the big players. No attorney would help a homeowner to save there home from MERS. I did hear of a attorney in Florida that was trying to help homeowners. Now that the homeowner has lost there homes and jobs a attorney wants to help the government get some money from MERS. What about all the american people that lost there home because of MERS and what wall street packaged? I think the American People need to be part of the suit after all they can’t pay taxes anymore because they have no home or job.
alina- I know that the members must indemnify MERS, but I think that that hold harmless clause will evaporate when the extent of the fraud becomes apparent. Sort of like when you sign a waiver at a ski area, amusement park, or similar, absolving them of all responsibility, if death or dismemberment occurs, the waiver which you signed is meaningless. Not a great example, but you know what I mean.
To Karen Pooley- this is great news! Now, if you could tell me what a PAC is , who Hager and Hearne are, and what suits they have filed, I would greatly appreciate it.
Another update:
I just called this law firm to ask if I could pass along the PAC to connect the two of them.
Hager & Hearne had stated that they now have filed lawsuits in 30 states! I will let you know which states after I have this information, but this is GOOD news!
I am so excited! I just called the National PAC for the County, State and Municipal Employees….to let them know that if ALL states took action like California and Nevada did with this MERS fraud case, that not only would it give this employee unions power to prevent jobs lost, but it would give all of us fighting these criminal corporations power! They are actively taking this very serious! How about that for decisive action!
I also called my state Attorney General myself, but one call won’t have as much power as a National Union. I am so proud of myself!!! I think we all need to start the phone call campaigns!
Karen
206-396-4486
A little tidbit you all may not know about MERS – pursuant to the member’s agreement, the members must indemnify MERS.
So even if the plaintiffs win, it will not have much of an effect on MERS. However, considering that MERS papa and mama have abandoned the little one, who knows what will happen.
So much controvacy regarding MERS. If it looks like a duck …… But we need thus busting EIDE open at trial. It all must be transparent otherwise the trust will never return
Jan van Eck,
You are right – but we have to get to a jury.
Is it not true? MERS is not registered or exempt with the CA Secretary of State to do business in California. Hey Ms. Lejarde, how could you use the CA AG defense, by them refusing to accept the case as false claims cases, as if MERS was ligit? I guess that is what the civil suit is for? Hope I get called for jury duty on that one!
God willing every county in every state will go after MERS for their entitled recording fees. Get Em!!!
What is so heartening is to see that these bums are finally getting sued. The next step is to convince a jury, which, considering the argument of depriving the counties of recording fees (and that is one the taxpayers can wrap their heads around), should not be all that difficult. Sue the bums.
Ms. Lejarde, left out the MBA… but all in all the cadre of theives and mis managed goverment entities is part of the problem!
“MERS spokeswoman Karmela Lejarde on Friday called both suits “baseless” and pointed out that the attorney generals of both California and Nevada refused to accept them as false claims cases, essentially forcing Hager & Hearne to file civil suits.
“These same law firms have brought many other lawsuits against MERS and every one has failed,” she said. The MERS website further claims the MERS system is approved by Fannie Mae, Freddie Mac, Ginnie Mae, the Federal Housing Administration and Veterans Affairs, and the California and Utah housing finance agencies, as well as all of the major Wall Street rating agencies.”
They for sure need to introduce all of the MERS VP transfers of notes by the employees of the bank accepting the loans with no authority from the assignor to do so. Last I checked you couldn’t sign for the company transferring the loan to you unless you were employed or authorized to do so but hey its the magical effect of MERS!
The only way I see MERS as legitimate is if they actually duplicate what is done at the county records level INCLUDING free and open viewing of all records AND if they actually had required secure access for people to add and alter records under their control. By running it as a “free for all” where virtually anyone with a userid/login could insert or change anything WITHOUT VERIFICATION … ALL THEIR RECORDS ARE SUSPECT.