As regular readers no doubt know, the reason for creating the electronic mortgage registry service MERS was to save on recording fees when notes (the borrower IOUs) were transferred through multiple parties when mortgage securitizations were set up. As MERS legal status has come under questions, a few local registrars of deeds (the officers in charge of local recording offices) have made estimates of the losses to their county and have come up with significant numbers.
As more and more information about mortgage abuses have gotten media coverage, some registrars of deeds have dug further into their records to document their extent.
So far. only a couple of local officers are undertaking these assessments, on their own initiative. At the same time, their efforts provide persuasive evidence of the extent of abuses, and thus help support the critics’ case. If more recorders were to take interest and start digging in their files and come up with tallies of various types of misconduct, this could have a significant effect on the debate. A favorite tactic of the banks has been to treat problems as “mistakes” and therefore exceptional. If more local level compilations show that “mistakes” are common or even pervasive, it will reveal that these alleged errors were a cynical profit maximizing policy dressed up as incompetence. And it would again show the banks to be liars.
From Dave Dayen at the American Prospect:
Jeff Thigpen, the register of deeds in Guilford County, North Carolina, a county of about 465,000 in the center of the state (the largest city is Greensboro), decided to survey all the mortgage documents submitted to his office by DocX, a notorious “mortgage mill” that processes documents on behalf of lenders, between August 2006 and April 2010…
Out of the 6,100 documents Thigpen examined, 4,500 showed signature irregularities. The name of one DocX employee, Linda Green, who was acting as a vice president for several major banks, was forged 15 different ways on the Guilford County documents, rendering them invalid. Thigpen’s investigation was one of the first systematic assessments of mortgage document fraud in the entire country, certainly more robust than anything conducted by state and federal regulators…
Thigpen hooked up with another register of deeds, John O’Brien of Essex County in Massachusetts, who was just as concerned about MERS and pervasive document fraud. O’Brien is seeking back fees from the banks for the mortgage transfers that went through MERS and circumvented the registers’ offices (and the accompanying recording fee), which could amount to hundreds of millions of dollars for his county…. Thigpen and O’Brien want to attract more registers to their cause, saying they’re currently in “alarm-sounding mode.”…
Thigpen, O’Brien, and other registers have two goals. First, they want to return the system of land titles to public hands, phasing out MERS and requiring all transfers to be filed. “You need an entity with public oversight tracking these transfers, not a private entity with no accountability,” Thigpen says.
Second, they want to slow down the rush to settlement between state attorneys general and the banks. They have publicly called on Iowa Attorney General Tom Miller, who is leading the negotiations, to put them on hold until there is a deeper investigation of the damage caused by the banks. They also want to be involved in any future settlement talks, armed with the knowledge of what is sitting in their offices. Miller has yet to respond.
It looks like they’ve already gotten their wish as far as the attorneys general settlement talks are concerned, From what we can tell, they are falling apart. Hopefully Thigpen and O’Brien will enlist some of their peers, and perform some tabulations which will demonstrate how the officialdom has failed to do basic datagathering on the mess that continues to afflict the one of the foundations of the American economy.