Pennsylvania counties could receive more than $1 billion after a recent federal court ruling against the banking industry's mortgage registry, which was found to have allegedly violated state law.
A U.S. district court judge ruled late last month that the Mortgage Electronic Registration Systems and its parent company, Merscorp - collectively known as MERS, which handles more than 50 percent of all U.S. home loans - violated state law by using the members-only database to avoid county recorder of deeds offices, Philly.com reports.
The judge said in the ruling that, as a result of the alleged missteps, Pennsylvania's counties lost millions of dollars in fees, public record accuracy was compromised and home loans were sold without the knowledge of homeowners or county officials.
Merscorp President Bill Beckmann said he disagreed with Joyner's ruling, adding that the company is exploring additional options available in the legal process, according to Philly.com.
The suit against MERS goes back to 2011, when Montgomery County Recorder of Deeds Nancy J. Becker filed suit against the company, alleging that the county lost $15.7 million in recording fees between 2004 and 2011 - according to Becker, a "very very conservative estimate."
"We took all the MERS mortgages between 2004 and 2011 and then multiplied them by two, assuming they were sold once," Becker said, Philly.com reports. "But other recorders in other states... have found most of these mortgages were sold 10 to 12 times."
Established by the banking industry in the 1990s, MERS was the subject of discussion during the U.S. foreclosure crisis. Though the company does not buy or sell mortgages, it provides a marketplace for such transactions.
Since the ruling lawyers across the nation have reached out to county recorders countrywide. Though the suit is based on state statute, the case could be more significant, according to Philly.com.
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