There are almost 150,000 mortgages on record at the Southern Essex County Registry of Deeds with cloudy ownership due in large part to an alleged scheme by a mortgage transfer company to avoid paying millions of dollars in fees, officials say.
The company, Mortgage Electronic Registration System, which is partly owned by Bank of America, transferred thousands of mortgages in recent years without paying state-mandated transfer fees, according to John O'Brien, the Southern Essex County Register of Deeds.
Yesterday, O'Brien called on the Massachusetts Treasurer to pull all of the state's money out of Bank of America because of the bank's connection to the alleged scheme.
O'Brien, whose Salem office oversees mortgages for most of southern Essex County, said the practice has been known about for some time, but came into sharper focus with a '60 Minutes' broadcast Sunday night highlighting some of the problems associated with MERS and Bank of America.
Kevin Harvey, 1st Assistant Register, said that it's not just unpaid fees at stake. There are 148,000 mortgages on record at the Southern Essex County Registry of Deeds with cloudy ownwership in large part because of the way MERS documented, or failed to document, the transfers.
"We have a forensic mortgage auditor looking at their records," Harvey said yesterday. "Once we have that, we may find that their records aren't accurate. There may be fraudulent assignments, and a significant amount of assignments that are not filed. They'd file the original transfer, but after that, they never recorded the assignments because they didn't want anybody to know what they were doing behind the scenes."
O'Brien estimates that the county has lost over $22 million in unpaid mortgage transfer fees, and maybe much more. That money goes into the state general fund, and is also used to make payments to communities that have adopted the Community Preservation Act, such as North Andover.