The enterprising lawyer’s network has decided to go to town…… against MERS
Two lawyers in Reno, Nev., have filed suit in 17 states alleging that banks cheated counties out of billions of dollars. In Virginia, a lawmaker has asked the state’s attorney general to investigate MERS over its failure to pay recording fees. And everywhere elected officials and class-action lawyers turn, the back-office procedures of MERS are being called into question.
Oh, this is a good one….. the claims? Exactly what I’ve been talking about for quite some time….
MERS is “an admitted fee-avoidance scheme,” says Robert Hager, the Nevada lawyer who, along with his partner Treva Hearne, is filing the suits against MERS and its bank owners, including the government-backed mortgage-finance companies Fannie Mae and Freddie Mac. Fannie and Freddie provide a low-cost flow of funding to the nation’s mortgage markets by buying mortgages from lenders, packaging them into securities and then selling them to investors.
Oh where have I heard that before? Oh yeah…..
“The MERShole Yawns Wide“, among others….
The California suit alone could cost MERS $60 billion to $120 billion in damages and penalties from unpaid recording fees.
The liabilities are astronomical because, according to laws in California and many other states, penalties between $5,000 and $10,000 can be imposed each time a recording fee went unpaid. Because the suits are filed as false claims, the law stipulates that the penalties can then be tripled.
There is a problem with this, of course. MERS has almost no money. It’s just a computer, really, with a handful of employees. The better question is whether these suits can “reach back” to the corporate founders and enablers – whether through some theory of vicarious liability or similar they can get back to the banks that put this Frankenstein monster together.