New York (February 12, 2014, 3:31 PM ET) -- A Pennsylvania federal judge Tuesday granted class certification to deed recorders in Pennsylvania who allege Mortgage Electronic Registration Systems Inc. violated state law by failing to properly record mortgage assignments and pay recording fees. U.S. District Judge J. Curtis Joyner granted lead plaintiff Nancy J. Beckers motion for certification, finding that the deed recorders for 67 Pennsylvania counties allege MERS compromised public records by creating a separate system for members to record mortgage assignments. As a result, they did not record the mortgages in the public records at deeds offices and failed to pay the associated fees, according to the order. “Given that there are 67 counties in the commonwealth of Pennsylvania and that the identities of each of the individuals who presently hold the office of recorder of deeds is a matter of public record, we conclude that the proposed class, while admittedly on the small side, is sufficiently numerous that joinder of all would be impracticable,” the order said. The judge granted Becker’s April 2013 motion for class certification, finding that all of the county deed recorders allege identical claims, that all were similarly injured by MERS’ actions and that Becker makes an adequate class representative who would not accept a settlement that would only benefit her own county. Becker, the deed recorder for Montgomery County, filed the suit in November 2011, seeking to compel MERS to record all mortgage assignments with the deeds office and to pay the attendant recording fees. By using the separate system, members deprived the deed recorders of the money they should have received, the complaint alleged. The suit also targeted MERSCORP Inc., the owner of the electronic mortgage registration system, which runs the registry and tracks mortgage loans for some of the countrys biggest banks. MERS, which was started in the mid-1990s by the mortgage banking industry, works through an electronic registry in which its members can sell and buy mortgage obligations at a moments notice while the MERS name stands in for them on the mortgage title in local records. In the past, any trading of a note would have theoretically needed to go through a sometimes-lengthy filing process at a recorder or registry of deeds office. Many other suits have been filed over the system, several of which also target specific banks including Bank of America NA and U.S. Bank. Opponents say MERS obscures ownership information from consumers who are not members of the registry. Delaware hit the system with a lawsuit in 2011, alleging the issues with the system helped lead to the U.S. home foreclosure crisis. MERS settled the suit with Delaware in July 2012 by making concessions to the state, agreeing to ensure that the database allows homeowners to clearly see who owns the mortgage and who services the loan, according to its statement. Similar suits have also been filed in New York, Texas, Kentucky, Michigan and Ohio, seeking to recoup unpaid payment from MERS members. Plaintiffs are represented by Joseph C. Kohn, Robert J. LaRocca, William E. Hoese and Craig W. Hillwig of Kohn Swift & Graf PC, Jeffrey D. Schaffer of Cooper & Schaffer LLC, Jonathan W. Cuneo of Cuneo Gilbert & Laduca LLP, William H. Lamb, James C. Sargent and Maureen M. McBride of Lamb McErlane PC and Gary E. Mason and Jason S. Rathod ofWhitfield Bryson & Mason LLP. MERSCORP is represented by Robert M. Brochin, Andrew C. Whitney, Brian M. Ercole, Franco A. Corrado, James E. Delbello, Jr., Kristofor T. Henning and Nicholas C. Vance ofMorgan Lewis & Bockius LLP. The case is Montgomery County, Pennsylvania, Recorder of Deeds v. MERSCORP Inc. et al., case number 2:11-cv-06968, in the U.S. District Court for the Eastern District of Pennsylvania. law360/articles/509386/pa-deed-recorders-win-class-cert-in-mers-mortgage-row
Posted on: Wed, 02 Jul 2014 03:28:03 +0000
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