Biden
WILMINGTON, Del. (Legal Newsline) - The company that runs the mortgage registry MERS wants a lawsuit brought against it by Delaware Attorney General Beau Biden to be dismissed.
According to CBS News, MERSCORP and its subsidiary, Mortgage Electronic Registration Systems Inc., asked a Delaware judge Wednesday to dismiss Biden's deceptive trade practices suit.
MERS, incorporated in Delaware and based in Northern Virginia, was formed in 1995 to facilitate the growing mortgage finance market.
The company's attorneys argued Wednesday that the registry operates solely for the benefit of financial institutions, and does not provide any services to homeowners.
However, attorneys for the State responded that there are inaccuracies in the registry's data, which make it more difficult for homeowners facing foreclosure.
In October, Biden's office sued the company in Delaware Chancery Court for repeatedly violating the state's Deceptive Trade Practices Act.
Biden contends MERS is at the middle of the nationwide housing crisis.
"Since at least the 1600s, real property rights have been a cornerstone of our society," the attorney general said at the time. "MERS has raised serious questions about who owns what in America. A man or woman's home is not just his or her largest investment, it's their castle.
"Rules matter. A homeowner has the obligation to pay the mortgage on time, and lenders must follow the rules if they are seeking to take away someone's house through foreclosure. The honor system won't work."
According to Biden's suit, MERS is effectively a "front" organization that has created a registry but fails to properly oversee it or enforce its own rules on participating members.
The attorney general alleges that rather than maintaining an adequate staff to provide its services, MERS operates through a network of more than 20,000 deputized, non-employee, corporate officers who cause the registry to act without any meaningful oversight.
As a result, the company has recorded so-called "robosigned" documents, and has failed to follow its own rules designating proper institution of foreclosure proceedings, Biden alleges.
After hearing more than five hours of oral arguments Wednesday, Chancellor Leo Strine Jr. -- who reportedly was skeptical of the State's arguments -- asked to speak with attorneys behind closed doors to figure out "a path forward," CBS News reported.
From Legal Newsline: Reach Jessica Karmasek by email at jessica@legalnewsline.com.