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Registers of Deeds’ Work Gets Newfound Attention

Last Friday, Rachel Maddow featured Jeff Thigpen the courageous register of deeds in Guilford County, North Carolina, who has sued MERS and leading banks over faulty documents filed at his office. Rachel calls it an “exclusive” though I had the Thigpen lawsuit for you two weeks ago, in addition to profiles of Thigpen going back a year. But I won’t fault Maddow for that – it’s so rare that the issue of chain of title and foreclosure fraud gets on the teevee in a serious way, that any publicity is positive. Here’s the crux of the issue:

This is Jeff in his office in North Carolina. He’s the elected county register of deeds, which is one of the most humble little noticed jobs in government, right? He’s got Greensboro records going back to 1771 . He will pull down the old books and show them to you. All this documentation of who owns what signed by actual humans using their real names and ink. The records showing who owns what going back as long as the government exists. It says who owns what land and who owes who money for it. Jeff, this county register says he cannot be sure anymore who owns what in Greensboro or who has the right to kick anybody out. His office went back through a few years of records and they found for a few years, thousands of documents filed by big banks and mortgage companies, thousands of documents that looked to him like forgeries, like the companies that filed them did not care.

This feels like an alien broadcast coming from a country that has integrity about its land records. But yet this has been going on for years and years, with the federal government and most state regulators having just checked out on owning up to it or forcing a reckoning. It’s incredible when you think of it. All this wreck and Jeff Thigpen is ALONE, practically, suing the banks to try and get them to clean up the mess they’ve made of land records dating back almost 250 years.

There are some similarly courageous registers who have been pressing this case, though Thigpen’s goes the furthest in terms of forcing the banks to fix their errors. Other cases, like the class action in Dallas County, Texas, seek to get the banks to pay back recording fees on mortgages they traded through MERS, the private electronic registry. And another lawsuit just ruled late last week, in Oakland County, Michigan, attacks another example of ripping off counties, this time by Fannie Mae and Freddie Mac:

Michigan law imposes a transfer tax on deeds recorded at the county office. Fannie and Freddie refused to pay that, claiming that they were part of the Federal government and hence exempt. That argument was clearly ridiculous and a Federal judge ruled against the GSEs.

This is going to be a boon for cash-starved Michigan counties and the state. The statue of limitations is six years, and the county treasurer estimates the damages will be $3 to $4 million to the county and between $10 and $20 million to the state. The treasurer has asked the state to allow him to keep the state’s portion of they money in his county to fight foreclosures. Good luck with that.

Other counties in Michigan have related actions underway, and I’d expect any one that does not have a case in progress to file an action modeled on the Oakland case.

Wondering how Ed DeMarco can justify “conserving tapayer funds” when the agencies under his purview go and pull stunts like this.

These local actions have a great deal of potential. In addition, local clerks or registers of deeds do not typically get their names in the papers, and may welcome the attention. They may be more susceptible to local campaigns, seeing that they inhabit backwater offices and probably don’t field many constituent calls. The great foreclosure fraud activist Lisa Epstein is running for the clerk of courts in Palm Beach County, Florida (holding the same responsibility as a register of deeds), taking on an entrenched incumbent. That’s another fertile ground for activism. There’s a lot of possibility here, considering that the state and federal options appear to be blocked off.

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David Dayen

David Dayen