Beau Biden, Delaware Attorney General, Sues Big Banks' Mortgage Registry

Discussion in 'Politics' started by hvactec, Oct 30, 2011.

  1. hvactec

    hvactec VIP Member

    Jan 17, 2010
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    New Jersey

    Delaware Attorney General Beau Biden sued a private national mortgage registry on Thursday, citing a slew of deceptive trade practices that prevent homeowners from effectively fighting off foreclosure.

    The lawsuit in state court alleges that Mortgage Electronic Registration Systems Inc. deceived borrowers by knowingly obscuring important information, acting as an agent of the true owners of mortgage loans without authority, and failing to properly oversee the registry or enforce its own rules for foreclosure proceedings.

    Major mortgage industry players -- including Bank of America, Wells Fargo, Fannie Mae and Freddie Mac -- formed MERS in 1995 to bypass county records offices and facilitate the then-booming mortgage-backed securities market. That market's collapse helped bring about the 2008 Wall Street meltdown that sparked the Great Recession.

    In a statement outlining the lawsuit, Biden's office said that MERS "engaged and continues to engage in deceptive trade practices that sow confusion among homeowners, investors, and other stakeholders in the mortgage finance system, seriously damaging the integrity of the land records that are central to Delaware's real property system, and leading to improper foreclosure practices."

    Homeowner confusion arose from the fact that MERS assumed title to the mortgage instruments associated with the loans that its member organizations were bundling and selling off as securities. Yet MERS, according to the complaint, failed to ensure proper transfer of the mortgages, leading it to foreclose upon houses without the authority to do so. Homeowners trying to fight off foreclosure were hampered by the convoluted chain of title -- in other words, it wasn't clear who was actually foreclosing on them.

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    DE attorney General Beau Biden sued the private national mortgage registry MERS
    Last edited: Oct 30, 2011

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