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Louisiana sues 17 banks under RICO laws for MERS scheme

In line with other states, Louisiana is suing the nation’s biggest banks for bypassing recording fees due in transfer of real estate title, but Louisiana stands out for taking a different route and suing under RICO laws, just like the government does to major crime syndicates.

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Louisiana stands up to big banks

In the State of Louisiana, 30 judges representing 30 parishes are suing 17 banks, stating that the Mortgage Electronic Registration System (MERS) is a “scheme” set up to illegally defraud the government of transfer fees, and that mortgages transferred through MERS’ recording system are illegal as the promissory note of any mortgage is inseparable from the mortgage, which is what MERS does.

MERS was initially established by Fannie Mae and Freddie Mac nearly 20 years ago in conjunction with several major banks as a means to expedite the loan recording process as it used to be done through individual county clerk offices which was slow, and the founders went ahead even though most states did not have laws that authorized them to bypass the required filing with clerks.

Several states like Delaware and Ohio, along with the City of Dallas have already sued MERS and their bank partners, claiming millions were bypassed in filing fees due, and that the banks should have known that their filing system could lead to improper filing. These claims have been supported by numerous studies, one of which asserts that MERS destroyed the entire chain of title in America and is at the core of the housing crisis.

RICO laws took down the Gambinos, may penalize banks as well

What is different with Louisiana’s lawsuit is that they are pulling out the big guns and suing under RICO laws (Racketeer Influenced and Corrupt Organizations Act), alleging wire and mail fraud and a scheme intended to defraud the parishes out of their lawfully owed recording fees. RICO laws have taken down the Gambino crime family, the Genovese crime family, Hell’s Angels, and the Latin Kings and carry treble damages, which is triple the amount of actual damages.

The banks named in the suit, according to court documents are Bank of New York Mellon, Bank of America, Chase Home Mortgage of the Southeast, JP Morgan Chase, CitiMortgage, GMAC (now Ally Financial), HSBC, Merrill Lynch, Nationwide Advantage Mortgage Company, Suntrust Bank, United Guaranty Corporation, Washington Mutual (now owned by Chase), Wells Fargo, Deutsche Bank, U.S. Bank, and La Salle Bank.

For infractions dating back ten years, the 30 parishes are suing for the following and demanding a jury trial:

  1. Treble damages (which will likely be in the millions)
  2. Prejudgement interest as permitted by law
  3. Reasonable attorney’s fees and costs
  4. Interest on the judgment as provided by law
  5. A permanent injunction
  6. Such other relief as the Court deems just and proper

Tara Steele is the News Director at The American Genius, covering entrepreneur, real estate, technology news and everything in between. If you'd like to reach Tara with a question, comment, press release or hot news tip, simply click the link below.

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60 Comments

60 Comments

  1. Mike Dillon

    April 21, 2012 at 7:26 pm

    MERS wouldn’t be a terrible system IF a.) it had actual transparency and b.) it didn’t subject borrowers to potential identity theft by requiring their SSN in order to obtain ANY clue as to who might be the owner of their promissory note. I say any clue because the best that MERS will do is give a borrower the name of the trustee of whatever trust their note is purported to be securitized into. MERS doesn’t give the name of the actual TRUST. MERS v. Johnston, MERS v Saunders and MERS v. Silverberg got it right, IMO.

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Austin

Austin tops the list of best places to buy a home

When looking to buy a home, taking the long view is important before making such a huge investment – where are the best places to make that commitment?

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Looking at the bigger picture

(REALUOSO.COM) – Let us first express that although we are completely biased about Texas (we’re headquartered here, I personally grew up here), the data is not – Texas is the best. That’s a scientific fact. There’s a running joke in Austin that if there is a list of “best places to [anything],” we’re on it, and the joke causes eye rolls instead of humility (we’re sore winners and sore losers in this town).

That said, SelfStorage.com dug into the data and determined that the top 12 places to buy a home are currently Texas and North Carolina (and Portland, I guess you’re okay too or whatever).

They examined the nerdiest of numbers from the compound annual growth rate in inflation-adjusted GDP to cost premium, affordability, taxes, job growth, and housing availability.

“Buying a house is a big decision and a big commitment,” the company notes. “Although U.S. home prices have risen in the long term, the last decade has shown that path is sometimes full of twists, turns, dizzying heights and steep, abrupt falls. Today, home prices are stabilizing and increasing in most areas of the U.S.”

Click here to continue reading the list of the 12 best places to buy a home…

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Housing News

Average age of houses on the rise, so is it now better or worse to buy new?

With aging housing in America, are first-time buyers better off buying new or existing homes? The average age of a home is rising, as is the price of new housing, so a shift could be upon us.

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The average home age is higher than ever

(REALUOSO.COM) – In a survey from the Department of Housing and Urban Development American Housing Survey (AHS), the median age of homes in the United States was 35 years old. In Texas, homes are a bit younger with the median age between 19 – 29 years. The northeast has the oldest homes, with the median age between 50 – 61 years. In 1985, the median age of a home was only 23 years.

With more houses around 40 years old, the National Association of Realtors asserts that homeowners will have to undertake remodeling and renovation projects before selling unless the home is sold as-is, in which case the buyer will be responsible to update their new residence. Even homeowners who aren’t selling will need to consider remodeling for structural and aesthetic reasons.

Prices of new homes on the rise

Newer homes cost more than they used to. The price differential between new homes and older homes has increased from 10 percent traditionally to around 37 percent in 2014. This is due to rising construction costs, scarcity of lots, and a low inventory of new homes that doesn’t meet the demand.

Click here to continue reading this story…

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Housing News

Are Realtors the real loser in the fight between Zillow Group and Move, Inc.?

The last year has been one of dramatic and rapid change in the real estate tech sector, but Realtors are vulnerable, and we’re worried.

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Why Realtors are vulnerable to these rapid changes

(REALUOSO.COM) – Corporate warfare demands headlines in every industry, but in the real estate tech sector, a storm has been brewing for years, which in the last year has come to a head. Zillow Group and Move, Inc. (which is owned by News Corp. and operates ListHub, Realtor.com, TopProducer, and other brands) have been competing for a decade now, and the race has appeared to be an aggressive yet polite boxing match. Last year, the gloves came off, and now, they’ve drawn swords and appear to want blood.

Note: We’ll let you decide which company plays which role in the image above.

So how then, does any of this make Realtors the victims of this sword fight? Let’s get everyone up to speed, and then we’ll discuss.

1. Zillow poaches top talent, Move/NAR sues

It all started last year when the gloves came off – Move’s Chief Strategy Officer (who was also Realtor.com’s President), Errol Samuelson jumped ship and joined Zillow on the same day he phoned in his resignation without notice. He left under questionable circumstances, which has led to a lengthy legal battle (wherein Move and NAR have sued Zillow and Samuelson over allegations of breach of contract, breach of fiduciary duty, and misappropriation of trade secrets), with the most recent motion being for contempt, which a judge granted to Move/NAR after the mysterious “Samuelson Memo” surfaced.

Salt was added to the wound when Move awarded Samuelson’s job to Move veteran, Curt Beardsley, who days after Samuelson left, also defected to Zillow. This too led to a lawsuit, with allegations including breach of contract, violation of corporations code, illegal dumping of stocks, and Move has sought restitution. These charges are extremely serious, but demanded slightly less attention than the ongoing lawsuit against Samuelson.

2. Two major media brands emerge

Last fall, the News Corp. acquisition of Move, Inc. was given the green light by the feds, and this month, Zillow finalized their acquisition of Trulia.

…Click here to continue reading this story…

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