Pennsylvania Recorder of Deeds Moves Money Away from Banks that Participate with MERS
If I were a county official, I would be out of my mind about MERS. Setting aside all the legal problems with the organization, simply put, MERS denied county recorders billions of dollars in fees, deliberately, that they would have otherwise had to pay to file changes in land title records. Practically every county in America has money problems right now. This would be a hugely popular issue, to let constituents know that big banks stole money from their counties which could be going to services.
What’s more, the counties have methods at their disposal to at least pressure the banks, if not make them pay. They could do what the recorder in Montgomery County, Pennsylvania, outside of Philadelphia, just did (h/t Lisa Epstein):
Montgomery County Recorder of Deeds Nancy Becker is urging registers of deeds across state and the country to withdraw public money from any banks affiliated with the Mortgage Electronic Registry System (MERS), which she claims is undermining the practice of accurate land recording […]
“It clouds the chain of title, and it’s prohibiting (officials) from recording revenues they should be recording,” Becker said.
Since 2004, she estimates the county has lost $15 million in fees from 139,798 mortgages recorded via the electronic recording system that fails to reflect assignments. Becker said she fields calls about once a month from a homeowner seeking help finding proof a mortgage has been satisfied, so the person can sell their house.
“The problem is finding out where or with what firm a mortgage is assigned,” she said.
This is essentially Arianna Huffington’s “Move Your Money,” only on a much larger scale. Registers of deeds have larger bank accounts than individuals. Becker placed her money with a local bank in her area. If this could get scaled up to the funds for the whole county, then you are depriving the big banks some serious capital.
And the county recorders now have a powerful tool to prove the validity of their concerns with MERS, in the form of last weeks consent decree from federal regulators against MERSCORP. The order states that regulators “identified certain deficiencies and unsafe or unsound practices by MERS and MERSCORP that present financial, operational, compliance, legal and reputational risks to MERSCORP and MERS, and to the participating Members.” A recorder could easily use that federal decree to justify their removal of funds.
As Yves Smith says, this is a fairly minor effort at the moment, but Becker put a number of $15 million in fees lost from MERS. Other recorders across the country, like John O’Brien in Massachusetts and Jeff Thigpen in North Carolina are trying to recoup those funds. Becker got the “move your money” idea from O’Brien. The recorders are talking to each other. That’s bad news for MERS and its participating banks.