Three Boston-area counties plan to sue the banking industry’s Mortgage Electronic Registration Systems, claiming it helped large lenders improperly trade mortgages among themselves and avoid millions in filing fees.
“It just seems to be if you were a big bank, you didn’t necessarily follow the rules,” Norfolk County Register of Deeds William O’Donnell told the Herald.
Norfolk, Plymouth and Bristol counties have all signed on with law firm Bernstein Liebhard, which is lining up counties across America to sue MERS.
MERS is essentially a private clearinghouse that banks use to buy and sell mortgages to each other.
Lenders file documents once with registries listing MERS as a mortgage’s owner, then sell the loan over and over to each other without submitting any additional paperwork.
Critics claim that violates state land-records laws — and stiffs registries out of a $75-per-transaction fee.
Plymouth County believes it has lost as much as $6.5 million, while Bristol County thinks it’s out $3.1 million and Norfolk County feels it’s due $2.3 million.
Norfolk County Director Dan Matthews added that $40 of each fee goes to the state, which is struggling to plug gaps like the MBTA’s $161 million deficit.
“You might be able to keep the MBTA running if you had all of those $40 payments,” he said.
Read more here