Tuesday, June 4, 2013

NC Business Court: County Register Of Deeds Lacks Standing To Sue MERS On Behalf Of Screwed-Over Homeowners For Littering Recording Office With Robosigned Land Documents; Unfair/Deceptive Practices Claim Also Fails Where There Is No Direct Consumer Interaction Between Litigants

In Guilford County, North Carolina, The Business Journal reports:

  • A lawsuit filed last year by Guilford County alleging that the use of an electronic mortgage registrations system and a practice known as robo-signing had made a "mess" of the county's property records registry has been dismissed.

    The lawsuit, brought by Register of Deeds Jeff Thigpen, targeted a number of banks, loan services and foreclosure specialists who used MERS, a private mortgage registry, and robo-signing in the creation of mortgage-backed securities.

    Thigpen alleged that the use of MERS and robo-signing created legal uncertainty concerning property titles, made it difficult to discover and remedy title defects, caused the loss of homes due to illegal foreclosures and led to decreases in property values, among other damages. Among the defendants named in the lawsuit are Wells Fargo (NYSE: WFC), Bank of America (NYSE: BAC) and MERS.

    But in an opinion issued Wednesday, Judge John Jolly of the N.C. Business Court dismissed Guilford County's complaint, finding that the Guilford County register of deeds didn't have legal standing to sue on behalf of landowners affected by the practices.

    Additionally, Jolly ruled that the register can't claim unfair and deceptive business practices in the use of MERS or robo-signing because there's no commercial transaction with the register when recording a deed, nor enough of a hindrance to landowners who have been damaged to seek relief that the register of deeds has to seek it on their behalf.

    Thigpen had also alleged that the defendants were unjustly enriched by the practices at the center of the lawsuit, a contention Jolly dismissed.

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