The Washington State Supreme Court ruled unanimously yesterday that the mortgage industry’s controversial document-recording system lacked authority to start out-of-court foreclosures and might have violated state consumer protection laws, the Oregonian reported today. The state’s highest court ruled that lenders could not foreclose on homeowners in the name of the Mortgage Electronic Registration Systems Inc. (MERS) It found that MERS did not meet Washington's definition of a beneficiary and could not foreclose on behalf of a lender that holds the mortgage note. "Simply put, if MERS does not hold the note, it is not a lawful beneficiary," according to the opinion written by Justice Tom Chambers. The court also ruled that MERS's involvement in robo-signing mortgage documents, among other behaviors, appeared to violate Washington's Consumer Protection Act, but that consumers must try such claims on a case-by-case basis.
http://blog.oregonlive.com/business_impact/print.html?entry=/2012/08/wa…
Click here to read the court’s opinion.
http://www.courts.wa.gov/opinions/?fa=opinions.disp&filename=862061MAJ
In related news, Bank of America Corp.'s ReconTrust Co. unit, sued by Washington state for failing to comply with laws on foreclosure trustees, can’t do business there until it meets state criteria, Attorney General Rob McKenna said, Bloomberg News reported yesterday. ReconTrust, a provider of foreclosure services, failed to operate as a neutral third-party as required by Washington law, McKenna alleged in a lawsuit filed a year ago. The business failed to maintain offices in the state, its foreclosure notices did not identify loan owners, and the notices provided contradictory information about what borrowers needed to do to stop the proceedings, McKenna said yesterday in a statement announcing a settlement of the case.
http://www.bloomberg.com/news/print/2012-08-15/bofa-foreclosure-unit-mu…