Posted by AzBlueMeanie:
This is big. Vice President Joe Biden's son, Beau Biden, Attorney General of the State of Delaware, has filed a lawsuit against Merscorp Inc., the operator of a national mortgage registry used by banks, in the Foreclosuregate scandal. Mortgage Registry MERS Sued by Delaware Attorney General – Businessweek:
Merscorp Inc., the operator of a national mortgage registry used by banks, was sued by Delaware’s attorney general for allegedly using deceptive practices that hide information from borrowers.
The MERS database, which tracks ownership interests in mortgages, impeded the ability of homeowners to fight foreclosures and obscures its data, Delaware Attorney General Beau Biden said in a complaint filed today.
“MERS engaged and continues to engage in a range of deceptive trade practices that sow confusion among consumers, investors and other stakeholders in the mortgage finance system, damage the integrity of Delaware’s land records, and lead to unlawful foreclosure practices,” Biden said.
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Biden described MERS as “a front organization” at a news conference today in Delaware.
“The unreliability of the MERS System, when compounded with MERS’s reliance on the records in the MERS System, is deceptive and harms consumers by permitting and encouraging foreclosures for which the authority has not been fully determined and may not be legitimate,” the attorney general said.
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In his complaint, Biden said as loans are transferred, the changes are only recorded in MERS’ database, and the records of the transfer aren’t generally accessible to the public. MERS doesn’t have safeguards in place to ensure that transfers on its system accurately reflect actual transfer of ownership of the loan, according to the complaint.
The MERS system is “frequently inaccurate,” Biden said in court papers. When the MERS system doesn’t reflect the true owner of a mortgage loan, any action MERS takes on behalf of the purported owner is without authority, according to the attorney general.
“The MERS system has raised serious questions about who owns what in America,” Biden said at the press conference.
Biden asked the court to bar MERS from initiating any foreclosure actions in the company’s name, from acting as a nominal mortgage lender when it didn’t have a “beneficial interest” in the property and from recording such mortgages in the company’s name.
Biden also asked the court to stop MERS from assigning or taking any other actions on Delaware mortgages until the company’s system has been “audited and corrected,” according to the complaint. The court should order MERS to correct the chain of title on Delaware mortgages that were recorded in county offices, Biden said.
The case is State of Delaware v. MERSCORP Inc., CA6987, Delaware Chancery Court (Wilmington).
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Separately, New York Attorney General Eric Schneiderman subpoenaed Merscorp for information about how mortgage servicers including Bank of America Corp., JPMorgan Chase & Co., Wells Fargo & Co. use the system, according to a person familiar with the matter. The subpoena is part of an existing investigation with Delaware about mortgage operations of banks, according to the person, who declined to be identified because the investigation isn’t public.
MERS faces multiple unrelated lawsuits by counties over allegations that the company cheated them out of mortgage filing fees.
Dallas County, Texas, which sued last month, claims the system allows banks that own stakes in MERS to buy and sell loans without properly recording transfers with counties and paying the fee. Dallas County District Attorney Craig Watkins, who also sued Bank of America, said his county may be owed as much as $100 million.
New York Attorney General Eric Schneiderman is working with his Delaware counterpart, Beau Biden, to investigate what he called possible “criminal acts” by financial institutions tied to the foreclosure crisis. New York Working With Delaware on Criminal Foreclosure Probe – Businessweek:
“This was a man-made crisis — it was created by regulatory neglect and greed,” Schneiderman said last night in a TV interview.
“Beau Biden, who is the attorney general of Delaware, and I thought we really needed to dig in a little bit deeper,” Schneiderman told MSNBC’s Rachel Maddow. “We’re also looking at the conduct of individual institutions and individuals to see if there were misrepresentations made, to see if there was any fraud committed, to see if criminal acts were also a part of this.”
Interview begins around the 3:30 mark.
Visit msnbc.com for breaking news, world news, and news about the economy
Schneiderman has been investigating mortgage practices of banks as state and federal officials negotiate a settlement with lenders over foreclosure and mortgage-servicing conduct.
All 50 state attorneys general last year announced they were investigating bank foreclosure after disclosures that faulty documents were being used to seize homes. Negotiations with banks including Bank of America Corp. and JPMorgan Chase & Co. haven’t produced a settlement more than a year since the investigation began.
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Schneiderman and Biden have said any settlement with the banks shouldn’t provide liability releases to the companies for matters that haven’t been fully investigated, including the packaging of loans into securities.
Maybe we will finally see "somebody going to emergency, somebody going to jail" for the greatest fraud ever perpetrated in history.
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