Belleville, IL (KSDK) - The St. Clair County State's Attorney's Office filed a civil suit against 22 banks Monday morning, accusing them of engaging in fraud and deceptive practices by creating an allegedly secretive mortgage database and not properly filing documents with authorities.
In the mid-1990s, many banks and lenders created a holding company called the Mortgage Electronic Registration System (MERS), which then created a private electronic mortgage database system. That database was used to track the transfer of loans between lenders and Wall Street institutions.
Most home loans in the United States are on the MERS database.
According to the St. Clair County State's Attorney's suit, the MERS system amounts to a shadowy recording system, "eliminating the homeowners' and the public's ability to track the purchase and sale of properties through the traditional public records system."
The suit goes on to allege that MERS gives financial institutions the ability to avoid required transparency and get out of paying local fees. In St. Clair County's case, those fees are collected by the local recorder of deeds.
The St. Clair County State's Attorney's Office identified these banks in their suit: Bank of America, CCO Mortgage Corporation, CITI Mortgage, Corinthian Mortgage Corporation, Everhome Mortgage Company, GMAC Residential Funding Corporation, Guaranty Bank, HSBC Finance Corporation, Suntrust Mortgage, Wells Fargo Bank, WMC Mortgage Corporation, Bank of O'Fallon, Compass Mortgage, First Collinsville Bank, FirstCo Mortgage Corporation, First County Bank, Mid America Mortgage Services of Illinois, Mortgage Services III, Midland States Bank, Peoples National Bank, Commerce Bank, Regions Bank and UMB Bank.