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Delaware AG Sues MERS

""Delaware Attorney General Beau Biden"":http://attorneygeneral.delaware.gov/ filed suit Thursday against MERSCORP and its subsidiary, ""Mortgage Electronic Registration Systems"":http://www.mersinc.org/ (MERS). Biden charges MERSCORP with violating Delaware's Deceptive Trade Practices Act.


""MERS engaged and continues to engage in deceptive trade practices that sow confusion among homeowners, investors, and other stakeholders in the mortgage finance system,"" states a Thursday press release from Biden's office.

Biden alleges MERS violated the act in three major ways: by maintaining inaccurate information and withholding information from borrowers; by filing foreclosures without the authority to do so; and by not enforcing its own rules.

""The opacity of MERS' mortgage registration database makes it difficult for consumers to know or challenge inaccuracies in the MERS System,"" states the press release.


When MERS forecloses in its own name, borrowers are unable to question or challenge the merits of the action.

Biden alleges that MERS often acts at the behest of ""non-employee corporate officers who cause MERS to act without any meaningful oversight from anyone who works at MERS,"" according to the press release.

""This has resulted in MERS recording so-called ""robosigned"" documents,"" the release continues.

MERS is incorporated in Delaware and based in northern Virginia. MERS holds claims on more than 30 percent of Delaware mortgages and has filed foreclosures in its own name on more than 1,600 homes in Delaware since the beginning of 2008.

For its part, MERS adamantly denies Biden's allegations. ""Our business model is straightforward and transparent,"" states Janis Smith, MERSCORP's VP of corporate communications Thursday in response to the suit.

""There is no merit to the Delaware attorney general's allegation of deceptive practices, and we refute the claims that use of the MERS System caused confusion to borrowers or any other participants in the mortgage finance system,"" Smith added.

According to Smith's statement, homeowners can access their loan servicer information for free any time on the MERS system. Furthermore, the MERS website offers borrowers access to mortgage counseling and foreclosure prevention organizations.

Smith says MERS has cooperated with Biden's office's requests for information earlier this year and finds the lawsuit ""unexpected.""


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