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Mortgage registration company wants Delaware suit dismissed

WILMINGTON, Del. — A company that runs a nationwide electronic mortgage registry is asking a Delaware judge to dismiss a deceptive trade practices lawsuit filed by the Delaware attorney general’s office.

A judge on Wednesday heard a motion by Virginia-based Mortgage Electronic Registration Systems to dismiss the lawsuit, which MERS says is meritless.

State officials sued MERS last fall, saying it has sown confusion among consumers, investors and other stakeholders in the mortgage finance system and damaged the integrity of Delaware’s land records system.

An attorney for MERS argued that the state has no basis to accuse it of deceptive trade practices. Attorney Colm Connolly says under state law deceptive trade practices must involve interference with a competing business and allegations of confusing or deceptive advertising, neither of which applies to MERS.

2 comments

  1. These articles need to remind people that MERS is ground zero for the massive mortgage fraud and was created by Wall Street specifically to launder their fraudulent subprime loans. There is so much documentation on this that billions of penalties can be brought back to the state. Here in Maryland, politicians protected MERS from prosecution.

  2. Givt it a break, Cindy. MERS is no more a part of the mortgage fraud witch hunt than you are. MERS was simply an attempt by the mortgage industry to find an easier way to standardize what is a crazy quilt of 50 different state laws on mortgages and recordation practices as well as keep track of the millions of loans made each year. The real fraud was the politicians (as usual) who pushed the Community Reinvestment Act and threatened banks with class action law suits if they didn’t extend loans to unqualified buyers. Once banks were forced into making these extorted loans they tried to insulate the damage by turning them into securities that could absorb the predictably higher default rates forced on them by the government. Then Fannie Mae and Freddie Mac started guaranteeing these loans and that ingnited a firestorm of bad lending that led to the housing bubble. But rather than accept responsibility, politicians have to find someone to blame. MERS is one of those unlucky scapegoats.

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