Massachusetts AG Lawsuit Accuses Banksters Of Improper Foreclosures Based On Bogus Docs, MERS Of Corrupting Public Land Recording System

The New York Times reports:

• Citing extensive abuses of troubled borrowers across Massachusetts, the state’s attorney general sued the nation’s five largest mortgage lenders on Thursday, seeking relief for consumers hurt by what she called unfair and deceptive business practices.



• In addition to creating a new and significant legal headache for the banks named in the suit — Bank of America, JPMorgan Chase, Citigroup, Wells Fargo and GMAC Mortgage — the Massachusetts action diminishes the likelihood of a comprehensive settlement between the banks and federal and state officials to resolve foreclosure improprieties. Also named as a defendant in the Massachusetts suit was the electronic mortgage registry known as MERS, an entity set up by lenders to speed property transfers by circumventing local land recording officials.



• The attorney general, Martha Coakley, and her investigators contend that the banks improperly foreclosed on troubled borrowers by relying on fraudulent legal documentation or by failing to modify loans for homeowners after promising to do so. The suit also contends that the banks’ use of MERS “corrupted” the state’s public land recording system by not registering legal transfers properly.



• “There is no question that the deceptive and unlawful conduct by Wall Street and the large banks played a central role in this crisis through predatory lending and securitization of those loans,” Ms. Coakley said at a news conference announcing the lawsuit. “The banks may think they are too big to fail or too big to care about the impact of their actions, but we believe they are not too big to have to obey the law.”



• Ms. Coakley has been among the most aggressive state regulators in her pursuit of financial institutions involved in the credit crisis. In addition to her inquiry into foreclosure improprieties in Massachusetts, she has also conducted far-reaching investigations into predatory lending and securitization abuses.

For more, see Massachusetts Sues 5 Major Banks Over Foreclosure Practices.

See also: The Boston Globe: State sues five big US lenders (AG alleges banks skirted rules, sped foreclosures).

For the Massachusetts AG press release, see Five National Banks Sued by AG Coakley in Connection with Illegal Foreclosures and Loan Servicing (First Comprehensive Lawsuit to Address Foreclosure Crisis Seeks to Hold Banks Accountable For Illegal and Deceptive Conduct).

For the lawsuit, see Commonwealth of Massachusetts v. Bank of America, N.A., et al.