Tuesday, July 26, 2011
Massachusetts Attorney General Coakley and MERS
It has been some time since I have written on the Mortgage Electronic Registration System, about which legal issues abound. Keeping up with all the conflicting court decisions would be a full time job.
I was interested to read today, though, that Massachusetts Attorney General Martha Coakley has written a letter to the registers of deeds in Massachusetts stating that her office is "investigating creditor misconduct in connection with unlawful foreclosures, including failure to establish the right to start a foreclosure as well as filing false or misleading documents with registries in the Commonwealth." In addition, with regard to the federal and state negotiations for a settlement with large banks on mortgage issues, Coakley writes: "Massachusetts will not sign on to any global agreement with the banks if it includes a comprehensive liability release regarding securitization and the MERS conduct."
For its part, MERS issued a press release in response, which states: "The assertions about MERS are without merit. We will cooperate with the investigation and look forward to the opportunity to respond to the Massachusetts Attorney General's request. The use of MERS has been litigated in Massachusetts courts, and judges have upheld the legality of the MERS business model in the Commonwealth." The press release cites three federal court decisions in Massachusetts concerning MERS, but fails to mention the Ibanez case, which went to the Massachusetts Supreme Judicial Court, whose decision in that case did not favor MERS. (I wrote about the Ibanez case here. Note that the links to the "foreclosureblues" website in that post no longer work.)
The case law involving MERS is totally confused at this point, and federal regulators appear to want the whole problem to go away. It appears that they may not get their wish.
(Yves Smith discusses Martha Coakley's letter at greater length on her "naked capitalism" blog.)