Mortgage Servicing Fraud
occurs post loan origination when mortgage servicers use false statements and book-keeping entries, fabricated assignments, forged signatures and utter counterfeit intangible Notes to take a homeowner's property and equity.
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Wednesday, November 7, 2007

MERS Clipping Homeowners In Foreclosure With Inflated Legal & Appraisal Fees, Says Class Action Lawsuit

In a class action lawsuit originally filed in a Delaware Federal Court in September, with an amended complaint filed yesterday, two Missouri homeowners accuse Mortgage Electronic Registration Systems, Inc. ("MERS"), a home loan registration system allegedly controlled by an all star team of nine big time nationwide mortgage lenders, of overcharging borrowers for legal services in foreclosures. MERS reportedly charged borrowers for "attorney fees" of as much as $1,200 - $2,000 and upwards (see Lawsuit - page 18, paragraph 49) while MERS is only charged $400 - $500 by the attorney actually handling the foreclosure (see Lawsuit - page 15, paragraph 36).

The lawsuit also accuses MERS of charging borrowers appraisal fees ranging from $300 to $500 for appraisals that are (1) often times not done at all, or (2) done but some times are nothing more than "drive by" appraisals where the appraiser never actually gets out of his or her automobile (see Lawsuit - page 19, paragraph 52). In addition to MERS, the lawsuit names as additional defendants the following all star lineup of mortgage lenders who are allegedly the controlling shareholders of MERS:
  • Citigroup, Inc., Countrywide Financial Corporation, Fannie Mae, Freddie Mac, GMAC-RFC Holding Company, LLC, (doing business as GMAC Residential Funding Corporation), HSBC Finance Corporation, JP Morgan Chase & Co., Washington Mutual Bank, and Wells Fargo & Company.
Among other things, the lawsuit alleges that "MERS is grossly undercapitalized to cover the potential liability stemming directly from its role as primary mortgagee on tens of millions of Mortgage Notes." Because of this, the homeowners / borrowers also seek to hold the above listed all star lineup of mortgage lenders jointly and severally liable for damages as well as MERS (see Lawsuit - page 8, paragraphs 9(l) and 9(m)).

Representing the homeowners are Carmella P. Keener, Wilmington, DE, 
 9/1/11: Updated new contact information for Jeffrey M. Norton

Newman Ferrara LLP

1250 Broadway, 27th Fl.

New York, NY 10001


212.619.3090 (fax)

and Matthew S. Chase, University City, MO.


To view the lawsuit, see Trevino v. Merscorp Inc., et al..

For a media report which makes reference to this lawsuit, see Borrowers Face Dubious Charges in Foreclosures (subscription may be required; if no subscription, try here).

For other posts on questionable mortgage servicing practices, go here and go here.

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MERS...pimp, shill and strawman for the banks...MERS sucks!!

I hope people see this. It is hard to believe that no one seems excited about this suit. It is important.

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Fear not, Ag. I know at least one attorney that is finding this case of particular interest...

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I like that this attorney is using a "joint and several" allegation and strategy
against MERS.

If he wins; he could pick who he wants to collect from (deep pockets) if the judge does not include the % to be applied to each defendant.

You might want to look into this in your own suits.  Here is the legal definition of joint and several.

joint and several adj. referring to a debt or a judgment for negligence, in which each debtor (one who owes) or each judgment defendant (one who has a judgment against him/her), is responsible (liable) for the entire amount of the debt or judgment. Thus, in drafting a promissory note for a debt, it is important to state that if there is more than one person owing the funds to be paid, the debt is joint and several, since then the person owed money (creditor, promisee) can collect the entire amount from any of the joint signers of the note, and not receive more than a share from each debtor. If a party injured in an accident sues several parties for causing his/her damages, the court may find that several people were "jointly" negligent and contributed to the damages. The entire judgment may be collected from any of the defendants found responsible, unless the court finds different amounts of negligence of each defendant contributed to the injury. Defense attorneys should require the trier of fact (jury or judge sitting without a jury) to break down the amount of negligence of each defendant and the plaintiff if there is contributory negligence. Often the court will refuse to do so, allowing the plaintiff to collect from whichever defendant has the "deep pocket" (lots of money), and letting the defendant who pays demand contributions from the other defendants. (See: joint, contributory negligence, comparative negligence, contribution)

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