JONESBORO – Another southern Illinois county is suing a collection of national banks and mortgage companies for using an electronic mortgage registry they say sidesteps recording fees the county should have been collecting while leaving many residents wrongly in the dark about who holds their mortgages.
Union County State's Attorney Tyler Edmonds, who filed the lawsuit in March, argues that using the database system called the Mortgage Electronic Registration Systems Inc., also known as MERS, circumvents state property-recording laws. MERS tracks the transfers of loans between lenders and Wall Street securities entities, thereby eliminating the public's ability to see the purchase and sale of properties through the traditional public records system.
Bobby Toler, the county clerk, figures Union County has lost at least $35,000 in unpaid fees by the registry.
"The issue is, as that mortgage changes hands from Bank of America to bank X, to bank Y, to bank Z, you just get something in the mail that this bank has it," Edmonds said. "This is just something where the banks need to follow the law everyone else is required to follow, including our local people here and our local banks."
St. Clair County filed a similar lawsuit last month.
A MERS spokeswoman declined to comment on Union County's lawsuit, but the system hopes to get the lawsuit moved to federal court.
The lawsuit is the latest against MERS. New York Attorney General Eric Schneiderman filed suit earlier this year, accusing some of the nation's biggest banks of deceit and fraud in using the registry he said saves banks over $2 billion.
"The banks created the MERS system as an end-run around the property recording system, to facilitate the rapid securitization and sale of mortgages," Schneiderman said then.