Mass Attorney General leads dissent against big bank settlement

Massachusetts Attorney General Martha Coakley has announced that she will oppose the inclusion of MERS (Mortgage Electronic Registration System) issues in the $20 billion mortgage settlement deal proposed by the Department of Justice. The deal would release the banks from legal claims in state investigations and lawsuits. Despite pressure from the Department of Justice to sign on to the settlement, several states have launched investigations into the use of the MERS system, which homeowner advocates and activists have claimed transferred mortgages, but never recorded them with local registries of deed. Therefore, the transactions, and thereby the mortgages are invalid, leaving the titles to homes “clouded.” The homeowner could then find themselves unable to sell or refinance properties without going to court.

New York Attorney General Eric Schneiderman shares Coakley’s concerns, and launched his own investigation into MERS and the mortgage issues in April. Schneiderman said he was shocked to learn the government’s multi-state probe lacked documents and had no witness depositions. Elizabeth Warren, a senior adviser to President Obama agreed, stating that the government may not have fully investigated the allegations of illegal seizures of homes.

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