Schneiderman brings fraud suit against banks
Feb 08, 2012 12:52 am
The Times-Union's Casey Seiler writes about a large lawsuit New York's Attorney General Eric Schneiderman is bringing against several of the nation’s largest banks. The suit charges that the creation and use of a nationwide Mortgage Electronic Registry System has resulted in “a wide range of deceptive and fraudulent foreclosure filings in New York state and federal courts, harming homeowners and undermining the integrity of the judicial foreclosure process.” In broad terms, the suit alleges that the banks used MERS as a front for millions of home loans so that they could easily securitize those mortgages. The AG further alleges that MERS has fraudulently identified itself as the plaintiff in foreclosure actions without the documentation to claim ownership of the loans in question. MERS has been the target of numerous legal actions, including ongoing actions by Massachusetts and Delaware. Unlike many of those suits, this one alleges fraudulent practices as opposed to questioning MERS’ business practices, or its very existence as structured. Suits questioning the company on that basis have encountered resistance from many state courts, most recently in Idaho. The lawsuit was filed in State Supreme Court in Brooklyn on Friday. It seeks “a declaration that the alleged practices violate the law," as well as injunctive relief, damages for harmed homeowners, and civil penalties” The AG released a statement identifying Bank of America, J.P. Morgan Chase, and Wells Fargo as defendants and “MERS certifying officers” accused of having “repeatedly submitted court documents containing false and misleading information that made it appear that the foreclosing party had the authority to bring a case when in fact it may not have." The paper reports that the suit was in development long before Schneiderman was tapped by President Barack Obama to co-chair a special task force to investigate the mortgage securities industry. Read about the lawsuit in the Times Union.