Today New York State Attorney General Eric Schneiderman charged several major U.S. banks with executing a range of “deceptive and fraudulent” foreclosure filings through the creation and use of MERS, a private national mortgage electronic registry system.
According the the compliant, agents and employees of Bank of America, JPMorgan Chase and Wells Fargo “have 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 complaint also alleges that the MERS system eliminated the ability of homeowners and the public to track property transfers, further clouding the foreclosure process. “The banks created the MERS system as an end-run around the property recording system, to facilitate the rapid securitization and sale of mortgages. Once the mortgages went sour, these same banks brought foreclosure proceedings en masse based on deceptive and fraudulent court submissions, seeking to take homes away from people with little regard for basic legal requirements or the rule of law,” Schneiderman said.
This is just the latest in a series of lawsuits surrounding foreclosure fraud, and likely not the last. While there has been plenty to be upset with in terms of how the Obama administration has responded to Wall Street pressure, no one can accuse Schneiderman of taking it easy on Big Finance. Given his new role in the Obama administration and this announcement following so closely, expect to see more in the way of punitive actions taken against the financial sector.
Photo from tracy o via flickr.