Eric Schneiderman Suing Three Major Banks For ‘Deceptive And Fraudulent Foreclosure Practices

eric schneiderman mortgage Eric Schneiderman Suing Three Major Banks For Deceptive And Fraudulent Foreclosure Practices

Eric Schneiderman (Photo: Getty)

State Attorney General Eric Schneiderman filed a suit today against Bank Of America, J.P. Morgan Chase and Wells Fargo for creating and using a private national mortgage electronic registry system called MERS to bring ” foreclosure proceedings en masse based on deceptive and fraudulent court submissions.”

“The banks created the MERS system as an end-run around the property recording system, to facilitate the rapid securitization and sale of mortgages,” Mr. Schneiderman said in a statement about the suit.

Mr. Schneiderman’s lawsuit also names the Virginia company MERSCORP, Inc. and its subsidiary, Mortgage Electronic Registration Systems, Inc., which owns the database. Additional defendants include BAC Home Loans Servicing, LP, Chase Home Finance LLC, EMC Mortgage Corporation and Wells Fargo Home Mortgage, Inc. According to Mr. Schneiderman, the trio of banks acted as “MERS certifying officers.”

The lawsuit alleges banks used their membership in MERS to avoid publicly recording the purchases and sales of mortgages and to initiate foreclosure proceedings based on inaccurate data.

“Our action demonstrates that there is one set of rules for all – no matter how big or powerful the institution may be – and that those rules will be enforced vigorously. Only through real accountability for the illegal and deceptive conduct in the foreclosure crisis will there be justice for New York’s homeowners,” Mr. Schneiderman said.

MERS was created by the mortgage banking industry in 1995. According to the MERS website, the purpose of the system was ” to streamline the mortgage process by using electronic commerce to eliminate paper.” MERS claims to do this by acting as the mortgagee for loans registered on the system even if the loan is transferred between different banking institutions. Last February, a bankruptcy judge on Long Island ruled MERS does not have the right to transfer mortgages. Mr. Schneiderman’s statement said there are about 30 million active loans in the MERS system with approximately 20,000 “certifying officers” authorized to act on MERS’ behalf.

Mr. Schneiderman is also fighting the mortgage industry on the federal level. At the State of the Union address, President Barack Obama announced he appointed Mr. Schneiderman to chair a new task force to investigate frauds involving home loans and mortgage-backed securities. In an interview about the task force, Mr. Schneiderman said his Financial Crimes Unit would be dedicated to “going after the stuff that blew up the economy.”

Comments

  1. Amen!    And Thank You.

  2. I am fighting foreclosure on my home by B of A.  I have had my hopes falsely raised by this administration so many times already that it is pathetic.  I actually thought that the government was going to do something for the average citizen/homeowner.  Ha!  The programs were all for show.  Nothing but a facade to trick the nation into thinking that our government was on  our side.  A public charade to distract from the fact that the ONLY ones being “taken care of” in this were the criminal banksters who were continuing to implement their plan to take homes from hard-working families and that’s all.  “Our” government screening the criminal fraud perpetrated against the citizens of this country.  

    You may now imagine the string of rude and crude words I would like to use concerning what has been done to me and my fellow citizens.

    I hold very little hope that this is for real and not just another pile of hot steamin’ BS and misdirection.  

  3. I am fighting foreclosure on my home by B of A.  I have had my hopes falsely raised by this administration so many times already that it is pathetic.  I actually thought that the government was going to do something for the average citizen/homeowner.  Ha!  The programs were all for show.  Nothing but a facade to trick the nation into thinking that our government was on  our side.  A public charade to distract from the fact that the ONLY ones being “taken care of” in this were the criminal banksters who were continuing to implement their plan to take homes from hard-working families and that’s all.  “Our” government screening the criminal fraud perpetrated against the citizens of this country.  

    You may now imagine the string of rude and crude words I would like to use concerning what has been done to me and my fellow citizens.

    I hold very little hope that this is for real and not just another pile of hot steamin’ BS and misdirection.  

  4. Skingk says:

    A start.  A perp walk with hundreds of banksters is required.

  5. Sage4557 says:

    Is Mr. Schneiderman also looking into Wells Fargo’s failing to provide mortgager with the insurance money needed to repair the homes that were damaged as the result of Hurricane Katrina,  I have not  been unable to complete the repairs on my home. Wells Fargo demanded I put the insurance payment into an escrow account and now they refuse to pay the bills I have submitted to them. This smacks of fraud. The only monies I did receive was through the help of Senator Foley (at the time) and Fema. It is now Feb/2012 and they have not paid the contractors, even though they are holding 23000 dollars of federally funded insurance money. There are thousands of people like me across the country just trying to save their homes. I am at the point where I have begun selling furniture in order to pay for materials needed for my repairs. This is not what American financial institutions are supposed to be about.

  6. American says:

    Finally, someone in politics who is willing to step forward and do what’s right for the country.  To hold those accountable for their actions, by which they’ve Greatly Contributed to The Nation’s Economic Downfall and Stuffed Their Pockets with Tax Payers’ Money, will be something to behold with great delight.  I just hope there will be no backing-down by the State Attorney General when the GOP and others do all they can to get in his way.   I hope he has dependable people working with him who won’t be shy about keeping their faces before the media, which will force those “too lazy to report what’s truly critical and relevant information for every single American” news people who have the power to inform and educate Americans (by doing their jobs) to stop ignoring their responsibilities to report REAL NEWS.