Sunday, February 3, 2013

Kentucky Joins Hit Parade Of State, Local Governments Suing MERS For Allegedly Illegally Dodging Recording Fees When Making Mortgage Assignments

In Frankfort, Kentucky, WFPL Radio 89.3 FM reports:

  • Claiming they committed fraud, Kentucky Attorney General Jack Conway has filed a suit against a mortgage company.

    Mortgage Electronic Registration Systems, or MERS, provides a marketplace for banks to trade mortgages and mortgage-backed securities.

    Conway says it was set up by banks to avoid the fees that must be paid when mortgages are sold and to hide the true owners of those mortgages.

    Conway's suit alleges MERS did not pay the proper fees in Kentucky. He's also suing under the Consumer Protection Act, because MERS foreclosed on many homes.

    “About 300,000 mortgages in Kentucky are MERS mortgages right now," Conway said. "We are able to fine up to $2,000 per violation of the Kentucky Consumer Protection Act.(1) We have that avenue of damages. And we also have the avenue to go after the recording fees that have been dodged as a result of this mortgage transfer scheme.”

    New York, Delaware and Massachusetts have also filed suit against MERS.
For the story, see Conway Alleges Mortgage Swapping Company Violated State Law.

(1) The Kentucky Consumer Protection Act is the state's version of the state laws that prohibit unfair and deceptive acts and practices in trade and commerce (commonly known as state UDAP statutes).

For more on UDAP statutes across the U.S., see Consumer Protection In The States: A 50-State Report on Unfair and Deceptive Acts and Practices Statutes.

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