by: Mark Ridder
Titan Lenders Corp General Counsel
I received the following excerpt in an email newsletter this morning:
MERS can’t seem to catch a break. Delaware Attorney General Beau Biden (does that name ring a bell?) has filed suit against the company alleging it repeatedly violated the state of Delaware’s Deceptive Trade Practices Act. Biden feels that MERS engaged, and continues to engage, in deceptive trade practices that cause confusion among homeowners, investors and other stakeholders in the mortgage finance system, seriously damaging the integrity of the land records that are central to Delaware’s real property system, and leading to improper foreclosure practices. These “deceptive” trade practices fall into three broad categories. The first is that “MERS, through its private mortgage registry, knowingly obscures important information from borrowers and the information that MERS does provide to borrowers is frequently inaccurate. The opacity of MERS’ mortgage registration database makes it difficult for consumers to know of or challenge inaccuracies in the MERS System. The second is that MERS often acts as an agent without authority from its proper principal. Because the MERS System was both unreliable and frequently inaccurate, MERS often does not know the identity of its proper principal. Where the name of the owner of the mortgage loan recorded in the MERS System does not reflect the true owner, any action MERS takes on behalf of the purported owner is without authority. The third is that MERS is effectively a “front” organization that has created a systemically important mortgage registry, but fails to properly oversee that registry or enforce its own rules on its members that participate in the registry. Rather than maintaining an adequate staff to provide MERS’ services, MERS operates through a network of over 20,000 deputized non-employee corporate officers who cause MERS to act without any meaningful oversight from anyone who works at MERS.”
Inasmuch as the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the Office of Thrift Supervision, and the Federal Housing Finance Agency have embraced regulatory responsibility of MERSCORP, Inc. and MERS, Inc. under the Consent Order of 13 April 2011, the sovereign state of Delaware, once a fertile ground of the federalist ideals now seeks to join reckless and wasteful litigation forgetting it would likely also be necessary to join as indispensable parties all of the above named alphabet soup regulatory agencies. Perhaps the Biden, Esq. sought political mileage from the onset of litigation, certainly it must run in the family. Perhaps there was “fog on the glasses” obscuring the reality of ongoing reining in of MERSCORP, Inc. with a body regulatory to which it is accountable. Perhaps this is still another in democratically wasteful expenditure of time, money, and effort while in the background the deficits of data congruity are set aright. In any event, this most recent of litigious state bumpkins brings about hope that sanity will reign supreme, that the federal question will be acknowledged, and that MERSCORP, Inc. will ultimately be allowed in peace to render the expedited accurate service in mapping the oft incomprehensible pre-existing litany of state recordings of documents of assignment, allonges, and the preternatural muddying of waters which run deep and swift when a homeowner is faced with the emotionally overwhelming consequence of foreclosure. States’ attorneys general should lay down their arms and assist the federal righting of the MERSCORP, Inc. ship so information may be easily discoverable for all rather than perpetuating and exacerbating the WASTE of their actions attempting to assert states rights in a nationwide question.
As for me, I believe the Delaware matter will ultimately be accorded a place on the dung heap of foul litigation lost for it was brought on the ill fated foundation of political drum beating rather than its intended redress of wrongs done.