Tuesday, May 22, 2012
MERS mortgage database results in lawsuit in St. Clair County
Belleville, IL (KSDK) – The St. Clair County State’s Attorney’s Office filed a civil suit against 22 banks Monday morning, accusing them of engaging in fraud and deceptive practices by creating an allegedly secretive mortgage database and not properly filing documents with authorities.
In the mid-1990s, many banks and lenders created a holding company called the Mortgage Electronic Registration System (MERS), which then created a private electronic mortgage database system. That database was used to track the transfer of loans between lenders and Wall Street institutions.
Most home loans in the United States are on the MERS database.
According to the St. Clair County State’s Attorney’s suit, the MERS system amounts to a shadowy recording system, “eliminating the homeowners’ and the public’s ability to track the purchase and sale of properties through the traditional public records system.”