This case, brought by the Montgomery County Recorder of Deeds, challenges the banking industry’s system of privately transferring mortgages. The industry has circumvented millions of dollars in fees owed to the state of Pennsylvania by using a private recording system known as Mortgage Electronic Registration Systems, Inc. or MERS. In addition to hiding information that should be public, banks are systemically underfunding important services for people living in poverty. A significant portion of the avoided fees would go to support civil legal aid and affordable housing. We are representing local legal service and housing groups in filing amicus briefs.
- Law Center’s motion for leave to file a brief
- Amicus Brief of Community Legal Services, Inc., Pennsylvania Legal Aid Network and Housing Alliance of Pennsylvania
- Amicus brief declaration of support from Cmsr. of Phila. Dept. of Records Joan Decker
- Amicus brief declaration of support from Irv Acklesberg, Esq
- Appellants’ Opening Brief
- Freddie Mac Amicus Brief
- PA Bankers Association Amicus Brief
- PA Land Title Amicus Brief
- Brief for Appellee
- Appellee’s Motion to Certify Questions of State Law
- Law Center Amicus Brief
- Harvard Law School Amicus Brief
- NAILTA Amicus Brief
- Other Recorders’ Amicus Brief
- Notice of Oral Argument
Oral Argument Scheduled
Oral argument in County of Montgomery Recorder v. MERSCorp Inc, et al has been scheduled for Thursday, June 25, 2015, at The Albert Branson Maris Courtroom on the 19th floor of the U.S. courtroom at 6th and Market Streets in Philadelphia. Court will convene at 11 a.m.
Law Center Takes on Finance Industry with Amicus Brief
The Law Center filed a brief on behalf of Pennsylvania legal service providers and consumer advocates in opposition to briefs filed on behalf of the finance service industry in an important Third Circuit Court of Appeals case.
The case, brought by the Montgomery County Recorder of Deeds, challenges the banking industry’s use of private records of mortgage transfers as violating Pennsylvania’s mortgage recordation laws. The finance industry has avoided millions of dollars in fees in Pennsylvania by their private system; a significant part of those fees would go to non-profit legal service providers and to the Philadelphia Housing Trust for low income persons.
Freddie Mac, the PA Bankers Association, and the PA Land Title Association all filed amicus briefs on behalf of the appellants and in support of the Mortgage Electronic Registration Systems, Inc. (MERS) system. The Law Center’s amicus brief explains, “Contrary to the alarmist rhetoric of Appellants’ amici…requiring public disclosure of mortgage transfers in county title registries and requiring payment of filing fees will not ‘disrupt the modern systems used to finance mortgage lending in the United States,’…impose ‘new and onerous obligations,’…or force ‘a giant step backwards.’
The Law Center’s brief also states that MERS benefits no one but large players in the mortgage and title industries, and that there is no basis in fact for the appellants’ assertions that the MERS system benefits consumers.
The records in the MERS system are also notoriously incomplete and unreliable. The information in the MERS database is entered not by public servants, or even by employees of MERS, but rather by employees of MERS’s members, meaning the tens of thousands of employees of lenders, servicers, law firms, or title companies throughout the country.
The decision of the District Court correctly applied Pennsylvania law and should be affirmed. Requiring public recordation of all mortgage transfers will benefit Pennsylvania homeowners, as well as low-income people in need of civil legal services and affordable housing.
Law Center Files Amicus Brief in Class Action Complaint Against MERS
The Law Center filed a motion for leave to file an amicus brief on behalf of fellow service organizations Community Legal Services, Pennsylvania Legal Aid Network and the Housing Alliance of Philadelphia in connection with a class action complaint against MERSCORP, Inc. and Mortgage Electronic Registration Systems, Inc. (MERS). The Law Center’s amicus brief supports the Plaintiff’s class action complaint against MERSCORP, Inc. and MERS, which alleges that MERS, an online mortgage registry system, operates to circumvent county recording fees for mortgage transfers. As explained in the brief, the MERS system results in the loss of millions of dollars in legally-mandated funding for legal service organizations and affordable housing programs.
The complaint was filed in the Eastern District of Pennsylvania by Montgomery County Recorder of Deeds Nancy Becker in November of 2011 on behalf of a class of all county recorders of deeds and alleges that MERS allows its users to avoid paying recording fees due Pennsylvania counties when mortgages are assigned. The Defendants have filed two Motions to Dismiss, both of which were denied in whole or in part. The Court has invited the Law Center to refile a second amicus brief following the denial of the second Motion to Dismiss.
The Law Center’s amicus brief explains that under the Access to Justice Act, a portion of mortgage assignment recording fees (and other recording and filing fees) are remitted to legal services organizations to help provide free legal services to low-income people. In Philadelphia, another portion of recording fees provide housing support for low- and middle-income and disabled individuals. According to the brief, the MERS system, which allows mortgages to avoid recording assignments and paying fees, results in a loss of an estimated $11 million dollars that should have been collected and which would have supported these programs. While the court denied the motion for leave to file the amicus brief as moot, the Court invited the parties to refile the brief in connection with another motion.