County Could Recover Mers Fees

An April 23 Lane County Board of Commissioners meeting explored but did not go forward with the possibility of recovering lost filing fees from the Mortgage Electronic Registration Systems (MERS), a private company that tracks servicing rights and ownership of mortgage loans for big banks. Multnomah County is suing MERS and 18 co-defendants for $38 million, saying that it wreaked havoc on the public property records system and denied the county of required transaction fees. Commissioner Pete Sorenson moved to join the suit, but the conservative majority didn’t second the motion, saying that they wanted to consult the county attorney about possible risks.

Tom D’Amore said that the D’Amore Law Group, which represents Multnomah County, would advance $20,000 of expenses for Lane County and recover the standard one-third of any award MERS pays. While the Oregon State Bar prohibits firms from promising not to collect if a suit isn’t fruitful, D’Amore said that collecting expenses isn’t their standard practice.

“Not only is the county not being paid filing fees accurately, but the county really doesn’t know who owns the loan, who’s the possessor of the loan and who the true beneficiaries are of the loan,” D’Amore said at the meeting. This has resulted in loss of filing fees income for Lane County, damage to the county’s public record and difficulty for homeowners attempting to sort out foreclosure issues.

Commissioner Pete Sorenson tells EW that it was wrong for MERS to collect recording fees when the mortgages were not recorded with a public agency. He doesn’t know how much Lane County would seek in damages, but he says that economically, Lane County is approximately one-third of the size of Multnomah County, and damages could help both in the county’s general budget and in fixing the public record. “If we were to receive a portion of that money, it could be a substantial help for us in our recordation function,” he says.

Sorenson moved to go forward with the suit, but other commissioners indicated that they wanted to hear from the county attorney before making a decision. While the attorneys said that Lane County would not be liable for MERS’ legal costs if the suit didn’t result in a win, commissioners worried that putting the ownership records in order would be a cost for the county and that costs could be incurred if the lawsuit fails. “We’re already in great financial difficulty,” said Commissioner Jay Bozievich, “and adding risk or expense at this point is a really difficult decision for us to make, so that’s why I wanted to be clear that there is a risk and there is cost that will be incurred internally on our part if we decide to move forward and join Multnomah County.”