July 13, 2012 / 4:57 PM / 7 years ago

Electronic mortgage registry settles Delaware lawsuit

July 13 (Reuters) - MERS, the electronic mortgage registry, agreed on Friday to settle a lawsuit by Delaware accusing it of deceptive practices leading to alleged improper home foreclosures.

MERS settled without any admission of wrongdoing and without penalty. It agreed to provide reports to the Delaware attorney general’s office of audits of its records and agreed to require member banks to fix any errors in the reports.

“Every homeowner should be able to find out who owns their mortgage, not just the company hired to collect payments,” Delaware Attorney General Beau Biden said in a statement. “The MERS System functioned to obscure this important information.”

The Mortgage Electronic Registration System, known as MERS, is an electronic-lien registry created by the mortgage banking industry as a way to streamline and quicken mortgage recording and transfers.

Bill Beckmann, chief executive of Merscorp Inc, the Reston, Virginia, parent of MERS, said the settlement is consistent with steps the registry has taken nationwide.

Judge Leo Strine of the Delaware Court of Chancery had yet to rule on MERS’ motion to dismiss Delaware’s lawsuit at the time of the settlement. At a May hearing, Strine questioned a state lawyer about why the suit was brought under the state’s Deceptive Trade Practices Act.

MERS had previously agreed to a series of changes to its servicing process as part of a consent order with the U.S. Office of the Comptroller of the Currency.

MERS still faces lawsuits by attorneys general in New York and Massachusetts.

The case is State of Delaware v MERSCORP Inc and Mortgage Electronic Registrations Systems Inc, Delaware Court of Chancery, no. 6987. (Reporting by Nate Raymond; Editing by Dan Grebler)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below