Chester County seeks $10M in fees not paid on mortgages
Rick Loughery, Chester County Recorder of Deeds.
WEST CHESTER — Chester County Recorder of Deeds Richard Loughery announced Wednesday that he and Chester County have filed a lawsuit against several of the nation’s largest banks and others in the residential mortgage industry to recover millions of dollars in recording fees for mortgage assignments the banks failed to record in the County’s public land records.
Loughery said he estimates that as much as $10 million in recording fees may be due from the banks. The suit, filed on Oct. 10 in the Court of Common Pleas of Chester County, names Bank of America, Bank of New York Mellon, Citibank, JP Morgan Chase Bank, and Wells Fargo Bank, among others, as defendants.
The suit claims that the defendants conspired to circumvent the county’s Recorder of Deeds Office and evade paying recording fees by creating a private electronic registry system known as MERS (Mortgage Electronic Registration Systems) to track mortgage assignments among themselves.
“This practice violates the Commonwealth’s recording laws and has caused gaps, omissions and inaccuracies to appear in the County’s land records which undermine the integrity of our public land recording system,” said Loughery in a statement. “For hundreds of years the citizens of Chester County have relied on the accuracy and completeness of our records to verify title to properties, trace ownership of land, and know who holds the mortgages on their properties.”
Aside from the financial implications for the county, Loughery said that individual property owners were being hurt by banks’ actions.
“Because of the banks’ use of MERS, property owners are no longer able to verify the true identity of the holders of their mortgages because thousands if not tens of thousands of mortgage assignments have not been publicly recorded and do not appear in our records,” Loughery said. “As bad as the damage defendants have caused to the integrity of our public land recording system, their failure to pay required recording fees has also hurt the county by depriving it of much needed revenue to fund essential county services.”
The millions of dollars not paid by the banks, Loughery said, directly impact county taxpayers, as well.
“The fees collected by my office not only maintain the operations of the Recorder’s office, but are also used in part by the county to fund children and youth initiatives, veterans’ affairs, emergency services, the operation of the Pocopson Home, and care for our seniors,” said Loughery. “Without this revenue, the county has fewer resources for programs at a time when some of these banks are making billions of dollars in profits. I find this unconscionable and wrong.”
Loughery said the suit was necessary to get the banks and other financial institutions to operate within the law.
The lawsuit, said Loughery, “has been brought to require the banks to record every mortgage assignment affecting title to land within the county and to recover the funds the county lost because of the defendants’ unlawful conspiracy.”
The lawsuit is pending before Judge Jeffrey Sommer and is expected to go to trial next October.
