Eleven Oregon counties are suing a company that helped banks rapidly buy and sell mortgages before the 2007 financial meltdown.
MERS, the “Mortgage Electronic Registration System,” allowed banks to quickly trade mortgages and to bundle them into securities — without paying county registering fees.
The lawsuit alleges MERS should have registered those sales.
Attorney for the counties, Tom D’Amore, says homeowners who wanted to renegotiate during the financial crisis often couldn’t, because their mortgage hadn’t been registered locally, so it wasn’t clear who owned it.
“You can’t as a financial institution say, ‘Hey, we have a secured interest and protected interest in this property, unless you go down to the county recorders office and file the transfer,’” he said.
D’Amore and Multnomah County reached a $9 million settlement with MERS earlier this year.
The 11 counties are seeking $50 million in damages in the no-win, no-fee case.
MERS issued a statement saying it complies with Oregon law and all its recording statutes.
It said that at no point has the integrity of Oregon land records been compromised by MERS.