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Goldenberg Schneider Challenges MERS Shadow Recording System on Behalf of Ohio Counties

Goldenberg Schneider has filed putative class actions on behalf of Ohio counties against Mortgage Electronic Registration System, Inc. (“MERS”), its parent company, and various lenders known to be shareholders and/or members of MERS.  The complaints allege that the defendants created and maintain MERS to serve as a private shadow electronic registry in order to illegally bypass recording laws and avoid paying recording fees to Ohio counties.  Under the alleged scheme, MERS “members” falsely record mortgage instruments in MERS’ name, using MERS as a placeholder in the public records, even though MERS does not actually hold any real interest in the underlying transaction or property—a practice that undermines the public recording systems, which no longer accurately reflect property ownership and transaction histories as most subsequent assignments are never recorded with the county recorder.

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