Attorneys for the Texas county that includes Houston will seek permission Tuesday to hire outside counsel to sue Mortgage Electronic Registration Systems Inc. over unpaid mortgage-filing fees.
County attorneys will hire the same law firm, Malouf & Nockels, that handled a similar lawsuit filed by Dallas last month, County Attorney Vince Ryan said in an interview today.
The Dallas County District Attorney’s lawsuit claimed Merscorp Inc.’s MERS, which runs a national electronic registry of mortgages, cheated the county out of tens of millions of dollars in uncollected filing fees. MERS tracks servicing rights and ownership interests in mortgage loans on its registry, allowing banks to buy and sell loans without recording transfers with counties.
“Our preliminary estimate, based on very superficial knowledge, is we’re looking at a minimum of $11 million and it could be much, much more depending on the number of times the real estate was used as collateral and should’ve generated a filing fee,” Ryan said. The county may be seeking more than $100 million in unpaid fees, he said.
The lawsuit could be filed next week or the following week, John Odam, assistant county attorney for special projects, said in an interview today.
Dallas County District Attorney Craig Watkins, who also sued Bank of America Corp. last month, claimed that the county could be owed as much as $100 million in filing fees. The clerks of Kentucky’s Christian and Washington counties sued MERS, Chase Home Mortgage Corp., CitiMortgage, Wells Fargo & Co., Bank of America and others in federal court in Louisville in April over unpaid fees, seeking to represent all 120 counties in the state.
Electronic System MERS, a unit of Reston, Virginia-based Merscorp, says on its website that its aim is to place every mortgage in the country on an electronic, rather than a paper, system that allows members to buy and sell mortgages.
MERS acts as the lender’s nominee and remains the mortgagee of record as long as the note promising repayment is owned by a MERS member. Dallas County claims this allows banks to buy and sell loans without properly recording transfers with counties and paying the fee.
