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WilCo Clerk Seeking Legal Action For Unexpected Foreclosures
Williamson County released a 177 page audit report revealing missing and forged loan documents that could cause tens of thousands of unexpected foreclosures.
WilCo Clerk Nancy Rister is blaming mistakes on a Texas law that changed in 2003.
It allowed certain loan documents to be filed electronically into a national database called Mortgage Electronic Recording System or MERS. She says that changes did not exempt lenders from filing with the county.
However, MERS tells us if it is named in a document, the electronic filing is enough.
"I'm sorry they didn't read it that way, but that it state law. That's the only way we can have a free open system that is open to the public," Rister said.
According to the audit, right now 60,000 mortgage documents are estimated to be missing and more than half of the existing files are believed to be forged.
Rister plans to seek legal action, but this issue is so big, the county says, it can't afford to chase it. They plan to ask the Attorney General’s office to take over.
"Counties just do not have the resources to go after this kind of crime. And this is a crime because they have broken the law," Rister said.
MERS issued this statement:
"There is no merit to the allegations from the Williamson County clerk's office. All MERS deeds of trust are registered in the local land records and all recording fees are properly paid by the lender at the time of recording. In Texas the deed of trust does not have to be recorded each time there is a sale or change in servicing if MERS is the named mortgagee. Also, contrary to what the clerk says, the promissory note is never filed with the county (with or without MERS’ involvement). That's just not what’s done. There are no assignments that follow - no assignments are necessary when transfers occur between MERS members because the lien remains in MERS' name. Since no assignment takes place, there is nothing additional to record. However, when assignments out of MERS' name to a non-member take place, they are recorded in county land records and paid for.
The Chief Justice of the Texas Court of Appeals, Third District, at Austin, ruled as much in a recent case you can find here. The Texas Supreme Court refused to hear a challenge to our business model as well. You can find that here. The U.S. Court of Appeals for the Fifth Circuit (a federal court) provided a harsh assessment of theories against our business model.”
So bottom line, if you have a mortgage, you need to go to the county website and see if the current company you are paying matches up with the county’s documents. If not, you could be getting a foreclosure notice.
By Christie Post