Recording Fee Claims Against MERS Dismissed in Rhode Island

Mortgage & Real Estate

Mortgage Electronic Recording Systems Inc. has won dismissal of a lawsuit filed against it in a federal court in Rhode Island by the town of Johnston which claimed the mortgage registry owed it fees.

But the judge in the case, John J. McConnell Jr., declared in his ruling that the town did not have a case because Rhode Island law does not require mortgages and mortgage assignments to be recorded. Absent a statutory requirement to record, there are no damages, and therefore there is no course of action, the judge wrote.

Besides MERS and its parent company Merscorp, the town sued Bank of America, Citibank, CitiMortgage Inc., JPMorgan Chase Bank, Wells Fargo Bank, Deutsche Bank, Goldman Sachs Mortgage Co., GS Mortgage Securities Corp. and U.S. Bank.

In his ruling Judge McConnell points to a federal court decision made nearly 100 years prior, which said even though the mortgage was unrecorded it was still valid. He also cited a recent Rhode Island Supreme Court decision involving MERS as well.

In a press release, Merscorp director of corporate communications Jason Lobo said, Rhode Island courts have consistently upheld MERS valid role and authority. This ruling mirrors similarly dismissed recorder fee lawsuits brought by counties in North Carolina, Iowa, Florida, Arkansas, Illinois, Missouri and Kentucky.

However, a federal judge in Texas ruled Bank of America must face claims brought by a county in that state over government fees it avoided by using Merscorp to track property transaction.

Attempts to contact the town of Johnston via a number listed on its website were not successful.

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