AG Eric Schneiderman has filed suit against several of the nation’s largest banks, charging that the creation and use of a private national Mortgage Electronic Registry System has resulted in “a wide range of deceptive and fraudulent foreclosure filings in New York state and federal courts, harming homeowners and undermining the integrity of the judicial foreclosure process.”

In broad terms, the suit alleges that the banks used MERS as a front for millions of home loans that made it easy to securitize the living daylights out of those mortgages. The AG further alleges that MERS has fraudulently identified itself as the plaintiff in foreclosure actions although it lacks the documentation to claim ownership of the loans in question.

MERS has been the target of numerous legal actions, including ongoing actions by Massachusetts and Delaware. Unlike many of those suits, this one alleges fraudulent practices as opposed to questioning MERS’ standard — or “standard” — business practices, or its very existence as structured. Suits questioning the company on that basis have encountered resistance from many state courts, most recently in Idaho.

The lawsuit, filed in State Supreme Court in Brooklyn, seeks “a declaration that the alleged practices violate the law, as well as injunctive relief, damages for harmed homeowners, and civil penalties” — which could be a very big bill indeed for the plaintiffs.

The suit was clearly in development long before Schneiderman was tapped by President Barack Obama to co-chair a special task force on just the sort of abuses that are being alleged.

Defendents include Bank of America, J.P. Morgan Chase, and Wells Fargo, which are identified as “MERS certifying officers” and are accused of having “repeatedly submitted court documents containing false and misleading information that made it appear that the foreclosing party had the authority to bring a case when in fact it may not have,” according to the AG’s release.

The lawsuit names JPMorgan, Chase Bank, Bank of America and Wells Fargo as well as Virginia-based MERSCORP and its subsidiary, Mortgage Electronic Registration Systems.

The lawsuit further asserts that the MERS System has effectively eliminated homeowners’ and the public’s ability to track property transfers through the traditional public records system. Instead, this information is now stored only in a private database – which is plagued with inaccuracies and errors – over which MERS and its financial institution members exercise sole control. Additional defendants include BAC Home Loans Servicing, LP, Chase Home Finance LLC, EMC Mortgage Corporation, and Wells Fargo Home Mortgage, Inc.

“The banks created the MERS system as an end-run around the property recording system, to facilitate the rapid securitization and sale of mortgages. Once the mortgages went sour, these same banks brought foreclosure proceedings en masse based on deceptive and fraudulent court submissions, seeking to take homes away from people with little regard for basic legal requirements or the rule of law,” said Attorney General Schneiderman. “Our action demonstrates that there is one set of rules for all – no matter how big or powerful the institution may be – and that those rules will be enforced vigorously. Only through real accountability for the illegal and deceptive conduct in the foreclosure crisis will there be justice for New York’s homeowners.”

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http://blog.timesunion.com/capitol/archives/112451/ag-brings-suit-a...

Bank of America Corp., Wells Fargo & Co. and JPMorgan Chase & Co. were sued by New York Attorney General Eric Schneiderman over the creation and use of a mortgage database.

The banks’ use of the database, known as MERS, has led to deceptive and fraudulent foreclosure filings in New York state and federal courts, Schneiderman said in a statement today.

“The banks created the MERS system as an end-run around the property recording system, to facilitate the rapid securitization and sale of mortgages,” the attorney general said. “Once the mortgages went sour, these same banks brought foreclosure proceedings en masse based on deceptive and fraudulent court submissions.”

http://www.bloomberg.com/news/2012-02-03/bank-of-america-jpmorgan-c...