Home Loan Wholesale

Directory Listings of Top Lenders & Loan Brokers Online

May 13, 2013

MERS Predicts Another Home Loan Crisis

Category: Published Articles – admin – 10:39 am

Just as the dust settles from the recent home mortgage crisis, several credible mortgage advisory companies are predicting more trouble in the mortgage industry. You would think with the Dodd-Frank rules being implemented we would not be hearing this talk so soon. The fact is that not many lenders are offering programs for bad credit home loans so you would think with tighter lending guidelines we would be hearing more good news.

For almost 15 years, MERS and its members have avoided paying recording fees in order to boost the profitability of their operation in the name of creating greater efficiencies. The unpaid fees owed to numerous counties across the nation tally up to millions of dollars to individual counties and billions of dollars in local revenues lost. Some officials estimate banks have avoided paying over $200 billion in recording fees, depriving counties of important revenue.

Several states, including New York and Delaware, have sued The Mortgage Electronic Registrations Systems, Inc. over the last year alleging fraud for using an electronic mortgage database that resulted in “deceptive and illegal practices.” Under the lawsuits, the states claim MERS used false documents in foreclosure proceedings and questions its standing in foreclosure cases.

Now new lawsuits targeting MERS are targeting the rights of jurisdictions to collect fees from MERS members. Minnesota’s Ramsey and Hennepin counties are suing the Mortgage Electronic Registration Systems Inc. and a dozen financial institutions, claiming the use of MERS to avoid paying mortgage-assignment filing fees violates state law. The case is County of Ramsey v. Merscorp Holdings Inc., 13- cv-474, U.S. District Court, District of Minnesota (St. Paul). The District of Columbia and counties in Florida are now conducting due diligence to prepare lawsuits against MERS if the Minnesota lawsuit is successful.

A preliminary study conducted by the Minority Business Enterprise Legal Defense and Education Fund in Washington DC estimates that over the 9 year period from 2002 to 2010, approximately 350,000 mortgages were originated and MERS is estimated to have had a market share of roughly 60%. Of the estimated 210,000 mortgages that were controlled by MERS and its members, Washington, DC’s lost recordation fees are estimated to be in excess of $230,000,000. Chairman Tony Robinson believes these fees, if recaptured, could assist in developing affordable housing in the District of Columbia. Read the original article at the Washington Times. 

Share

No Comments

No comments yet.

RSS feed for comments on this post. | TrackBack URI

Sorry, the comment form is closed at this time.