I must confess I get a perverse sense of satisfaction from watching MERS suffering pushback on a variety of fronts. The latest, as we mentioned a few weeks ago, is the prospect of litigation by various local governments asserting the right to the recording fees that the MERS system bypassed.
The press release below is from the Guilford County Register of Deeds in North Carolina. As you can see, he is exploring the county’s options for recouping recording fees he believes that MERS owe to Guilford County, to the tune of $1.3 million (hat tip Lisa Epstein via ForeclosureFraud).
I particularly like this sentence:
“Do we want land records in America to be governed by major banking conglomerates on Wall Street or the people and laws of the United States of America?”
As we have indicated, MERS is far from a deep pockets target. And no one has yet filed a lawsuit; litigation is an expensive proposition for both parties. You could easily see the county spending more that it could possibly collect in legal costs.
The real question is whether a clever lawyer can find a legal theory that would allow the local governments to sue not just MERS but one of the parties that benefitted from the MERS process, presumably the sponsors. And then you’d need to file it on a class action basis so that the legal cost divided over a large number of plaintiffs would still allow for reasonable recoveries.