Now you, common middle class citizen, you have to pay a thirty dollar fee at a court house in most states for them to record a change in ownership in property. They have to do paperwork and change that little county map that shows who owns what. Now suppose you change the ownership again. You transfer it your spouse, your child, or you’re paying the fee as part of a sales contract. You have to pay a second thirty dollar fee.
Annoying, right? Of course, but has to be done. You have to know who owns what, right?
What if you don’t want to pay the second time? Well, you are out of luck there too. The state is not going to let you out of the fee. Besides without paying the fee, the records won’t show who owns the property, so it’s a good idea to pay it, right?
Everybody has to pay the fees, right??
No, they don’t.
If you are a bank using the MERS system, you don’t have to pay a second fee. (MERS = Mortgage Electronic Registry System)
You see all the transactions are done by computer therefore there is no fee for any transaction after the first one. The banks often transferred these properties dozens of times, but every transfer after the first one was free. Isn’t that great?
Now, you probably would like to say something dumb like, “Isn’t that state law?” Then you might follow it up with, “Doesn’t that mean they don’t own the property?!”
You silly person, don’t you realize this a is a banking institution? They are not like you.
They just decided not to pay.
See, when you want to change a law, you have to lobby and talk to people and ask the legislature to consider a bill changing the law, then it has to go through both houses and then be signed by the governor.
But when you are a bank, you simply decide not to pay the fees. It makes everything simple.
Now, there are those in this country who are bizarre individuals. Those strange people want the banks to cough up the money. So, the banks, their feelings deeply injured, have run to their friends in the United States Congress who are planning a surprise party for you.
At the surprise party a thinly clad financial industry lobbyist will leap out of a cake and tell you that Congress has legalized all that stuff that the banks have been doing for, Oh, about five years now.
Now you might ask another question at this point and it is not “Why aren’t I getting any cake?” Your question is “Doesn’t those payments to the country, those thirty dollars each time, aren’t those part of my county’s taxes?”
Why, yes, they are.
But remember, Virginia, there is a Santa Claus and he just took your county’s money and gave it to the banks.
What a sad story!
And it’s all true!!
It used to be that every time a bank sold a mortgage, the county land recording office received a fee. It wasn’t much — $30 or so — but then real estate boomed in the 1990s and banks pooled millions of mortgages into securities that investors bought and sold.
One mortgage transaction became a dozen or more, and the tab grew ever larger. So the banks came up with a way around the fees. And now they are fighting to avoid perhaps tens of billions of dollars in penalties that have added up over the years.
From further down in the article –
MERS is “an admitted fee-avoidance scheme,” says Robert Hager, the Nevada lawyer who, along with his partner Treva Hearne, is filing the suits against MERS and its bank owners, including the government-backed mortgage-finance companies Fannie Mae and Freddie Mac. Fannie and Freddie provide a low-cost flow of funding to the nation’s mortgage markets by buying mortgages from lenders, packaging them into securities and then selling them to investors.
The suits were filed in California, Nevada and Tennessee and 14 undisclosed states where the cases are still under court seal. Hager and Hearne chose the states because their laws allow what are called false claims suits, in which citizens can take legal action against companies that may have cheated the government.
The suits allege that by privatizing public records, MERS enabled banks to circumvent American property law and bypass the counties’ fee and paperwork requirements, costing billions of dollars in lost revenue over more than a decade. MERS says its process is legal, and that the fees are not required under its system.
If only we were all banks!