11 Oregon counties file $50 million lawsuit against MERS

MEDFORD, Ore. - 11 counties in Oregon, including Jackson, Josephine and Klamath, have filed a $50 million lawsuit against Mortgage Electronic Registration Systems (MERS) for failure to pay recording fees to counties.

According a statement from Josephine County Board of Commissioners:

"As the financial collapse of 2007 made clear, mortgage lenders, including MERS, were relatively scrutiny-free because they were able to offload high-risk mortgages, allowing them to be sold over and over again.. This scheme allowed MERS to bypass the County Recorder’s office, denying the County filing fees and preventing the Counties from having an accurate record of property ownership in their counties.

Before MERS, each property transaction in Oregon would have required the lender to file the transaction with the county clerk in order to protect the secured interest in the property.

Such County recordings are essential in assuring an accurate record of land ownership, transfers of ownership, and the names of the lending institutions on

properties in each County. With the mortgage industry on fire in the 90’s, a quick turnaround of these mortgages to financial institutions who wanted to bundle them

was the impetus for the creation of MERS. After the creation of MERS, lending institutions improperly listed the beneficiary of the trust deed or mortgage as “MERS”. Then, the mortgage could be transferred over and over among MERS

member banks and financial institutions without paying filing fees or recording the subsequent transfer with the County.

Regardless of whether Wells Fargo, Bank of America, or JPMorgan Chase owned the mortgage (the entire list of defendants is listed in the legal Complaint), MERS was improperly inserted in the eleven Counties’ public records as the mortgage holder. According to attorney Tom D’Amore, D’Amore Law Group, Portland, “By doing this, MERS and the financial institutions who embraced this scheme broke Oregon law. MERS compromised the Counties’ transparent and accurate property records system.”

Homeowners could no longer rely on the County’s records to determine their mortgage holder, and for those in foreclosure or wanting to work out a resolution with their lender, this was dire."