Massachusetts AG launches probe into MERS
Massachusetts Attorney General Martha Coakley will begin gathering foreclosure documents next week filed by the Mortgage Electronic Registrations Systems in a statewide investigation, according to a letter her office sent to state registers of deeds. Coakley will send civil investigative demands to the registers, requesting "critical information to our investigation" and vowed not to sign any agreement between lenders and other AGs if MERS is relieved any possible liability. "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 securitization and the MERS conduct," Coakley said. "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." MERS denied the assertions from Coakley in a statement sent to HousingWire yet a company spokesperson said MERS would cooperate with the investigation. "The assertions about MERS are without merit," the spokesperson said. "We will cooperate with the investigation and look forward to the opportunity to respond to the Massachusetts Attorney General's request. The use of MERS has been litigated in Massachusetts Courts, and judges have upheld the legality of the MERS business model in the Commonwealth." When mishandled and faulty foreclosure documents surfaced last year, federal regulators and the 50 state AGs launched investigations. Regulators found signs the problem was widespread and forced major mortgage servicers to hire third-parties for a wider review of loan documents. A report released by regulators showed MERS, a network created by the banks to simplify the selling of mortgage loans by eliminating the need to prepare and record assignments, did not invest enough resources or staff into the company in order to handle the wave of foreclosures. The AGs and servicers continue to work toward a negotiation. Registers of deeds in Iowa recently expressed similar concerns to the lead investigator and the state AG Tom Miller. Coakley will meet with her state registers on August 11th to hear their concerns regarding MERS and other foreclosure issues. Write to Jon Prior. Follow him on Twitter @JonAPrior.