Today, Attorney General Eric Schneiderman announced a lawsuit against Bank of America, JPMorgan Chase, and Wells Fargo over the large banks’ use of the Mortgage Electronic Registration Systems, or MERS, and alleging deceit and fraud. MERS is also named in the lawsuit. According to the AG’s office, the banks “have repeatedly submitted court documents containing false and misleading information that made it appear that the foreclosing party had the authority to bring a case when in fact it may not have.”
“The banks created the MERS system as an end-run around the property recording system, to facilitate the rapid securitization and sale of mortgages. Once the mortgages went sour, these same banks brought foreclosure proceedings en masse based on deceptive and fraudulent court submissions, seeking to take homes away from people with little regard for basic legal requirements or the rule of law,” said Attorney General Schneiderman. “Our action demonstrates that there is one set of rules for all – no matter how big or powerful the institution may be – and that those rules will be enforced vigorously. Only through real accountability for the illegal and deceptive conduct in the foreclosure crisis will there be justice for New York’s homeowners.”
Schneiderman was recently appointed by President Obama as co-chairman of a national unit meant to investigate the role of mortgage-backed securities in the financial crisis. He should be quite busy for next little while!