MERS & Its Deep-Pocketed Mortgage Lender Backers May Be On Hook For $200M+ For Massachusetts-Related Unrecorded Assignments

The Docket, the news blog of Massachusetts Lawyers Weekly, reports:

• The Mortgage Electronic Registration System, better known as MERS, perhaps one of the most recognizable players in the foreclosure mess, may owe the commonwealth hundreds of millions of dollars.

• The revelation surfaced following an investigation by John O’Brien, register of deeds in Southern Essex County. O’Brien and his staff found that the Salem registry alone had recorded more than 148,600 MERS mortgages since 1998, and that each mortgage had been assigned to other entities at least twice. MERS was supposed to pay a $75 recording fee for each assignment, but that never happened, according to O’Brien.

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• In some cases, MERS may have assigned mortgages to up to four other entities, based on a review from a nationally-renowned MERS expert who assisted in the investigation, Harvey said. Statewide, the loss could total more than $200 million.

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• Meanwhile, MERS recently announced several major policy changes. The electronic clearinghouse said it will now be recording assignments in the county land records throughout the country and that it will no longer foreclose under its name.

• “I am pleasantly surprised that MERS appears to recognize at long last that what they’re doing is illegal,” said Northampton foreclosure attorney Michael Pill of Green, Miles, Lipton & Fitz-Gibbon. Pill suspects that MERS lacks the assets to pay the recording fees it allegedly owes to the commonwealth and, most likely, registries throughout the country. But he said the mortgage lenders behind MERS have very deep pockets.

For the story, see MERS may owe commonwealth $200 million.