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New York Attorney General sues banks over electronic mortgage registration

Consumer Reports News: February 03, 2012 05:08 PM

The New York Attorney General, Eric Schneiderman, has brought suit against several big banks accusing them of deceit and fraud in how they used a mortgage electronic registration system, or MERS. Schneiderman says the banks' actions put homeowners at a disadvantage during the foreclosure process.

Schneiderman contends that despite no authority for foreclosure, banks submitted court documents containing false and misleading information that appeared to give that authority.

The national banks accused in the lawsuit include Bank of America, J.P. Morgan Chase and Wells Fargo. Schneiderman is also suing the registry operator, MERSCORP.

MERS was used by the banks in order to quickly package and sell mortgages as securities without recording each transaction in county records offices.

Among other complaints, homeowners have reported trouble responding to foreclosure actions and mortgage inaccuracies because MERS makes it difficult to find out who owns the mortgages, the Associated Press reports. For example, tracking property transfers through traditional public records is difficult, and the system is plagued by inaccuracies, alleges Schneiderman.

NY's Schneiderman sues banks in foreclosure effort [Associated Press]
NY AG Schneiderman sues banks, accusing them of deceit in use of electronic mortgage registry [The Washington Post]

Maggie Shader

   

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