Mortgage business 'stiffing' county
Monday August 15, 2011
PITTSFIELD -- A Virginia-based mortgage registry business mired in the nation's housing foreclosure investigation has apparently "stiffed" the three Berkshire Registry of Deeds offices of nearly $2 million in recording fees for more than a decade, local registry officials have claimed.
Mortgage Electronic Registration Systems Inc. of Reston, Va. failed to pay an estimated $1.18 million to the Middle District Registry of Deeds in Pittsfield from June 1999 through July of this year, according to Register of Deeds Andrea F. Nuciforo Jr. In addition, Nuciforo's staff has calculated that the Southern and Northern District registries in North Adams and Great Barrington respectively are owed a collective $775,000 during the same 12-year period.
The $75 state-mandated fee in question is for each time a home mortgage is sold or swapped -- known as an assignment -- to another lending institution after it has been initially recorded in the appropriate registry. The money collected goes into the state's general revenue fund.
MERS was established 16 years ago by mortgage companies Fannie Mae, Freddie Mac and financial giants like Bank of America and JP Morgan Chase to make it easier for banks and lenders to sell mortgages as an investment.
"It's become an elaborate stiffing scheme to avoid paying registry fees," Nuciforo said.
Nuciforo was among the state's 21 registers of deeds who met with Massachusetts Attorney General Martha Coakley last week asking she further probe MERS' recording practices, before signing off on a reportedly $20 billion nationwide settlement. Under the joint federal-states proposal, MERS would compensate the states for the unpaid fees and in return the company would be released from claims in all 50 states, according to published reports.
While Nuciforo couldn't comment on the specifics of the meeting due to the pending litigation, the former Berkshire state senator is confident Coakley will dig deeper into the MERS mess.
"Clearly, [she] understands the issues and appreciates how disruptive [MERS] activities are to the mortgage industry and our ability to collect fees," he said.
Coakley's assurance affirms what she wrote in a recent letter to the states registers of deeds.
"We have made clear that Massachusetts will not sign on to any global agreement with the banks if it includes a comprehensive liability release regarding ... the MERS conduct," she stated. "We strongly believe that these investigations must continue and responsible parties must be held accountable in order to fully protect homeowners and return to a healthy economy."
Coakley was referring to homeowners facing foreclosure unaware of who holds their mortgages after MERS assigned them -- often more than once -- without recording the transaction with the proper registries. In March, The New York Times reported how the lack of public documentation made it difficult for many mortgagees to fight foreclosure proceedings and keep their homes.
"MERS has jeopardized the integrity of the land recording system by assigning individual mortgages time and time again without a public paper trail," wrote John L. O'Brien Jr., Essex South Register of Deeds located in Salem. O'Brien's letter in December to the National Association of County Recorders, Election Officials and Clerks part of his to draw attention to MERS and spearhead the campaign calling for a state and federal probe of the mortgage registry firm.
Registers of deeds usually remain out of the political spotlight, unless up for re-election, but Nuciforo believes he and his colleagues must prevent MERS alleged deceptive practices.
"I have an obligation to make sure our [registry's] documents are an accurate reflection of who owns the mortgage to a property," he said.
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Pay up ...
Local Registers of Deeds among the 21 statewide seeking millions in compensation from MERS, a private mortgage registry company accused of failing to pay billions in land recording fees across the country. The estimates below are based MERS activities involving Berkshire County home mortgages from June 1999 to July of this year. The money collected goes to the state's general revenue fund.
n $1,180,800 owed the Middle District Registry of Deeds, representing Becket, Dalton, Hinsdale, Lee, Lenox, Otis, Peru, Pittsfield, Richmond, Stockbridge, Tyringham and Washington.
n $447,300 owed the Northern District Registry of Deeds, serving Adams, Cheshire, Clarksburg, Florida, Hancock, Lanesborough, New Ashford, North Adams, Savoy, Williamstown and Windsor.
n $328,085 owed the Southern District Registry of Deeds, covering Alford, Egremont, Great Barrington, Monterey, Mount Washington, New Marlborough, Sandisfield, Sheffield and West Stockbridge.
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