Nick Hytrek, Sioux City Journal
A federal judge has dismissed a class-action lawsuit that claimed a national electronic mortgage registry company was enabling banks to avoid paying Iowa mortgage registration fees.
U.S. District Judge Mark W. Bennett said in his ruling, filed Tuesday, that Iowa law does not support the claims raised by Plymouth County Attorney Darin Raymond, who in March filed the lawsuit in U.S. District Court in Sioux City on behalf of all 99 Iowa counties against MERSCORP Holdings Inc., Mortgage Electronic Registration Systems Inc., known as MERS, and several large banks and mortgage companies.
Raymond had contended that MERS has allowed banks subscribing to the company’s service to skirt Iowa’s public information and recording laws by trading mortgages through an electronic registry that lists MERS as the mortgage holder, even though the banks are buying and selling the mortgages. The MERS electronic system tracks changes in ownership so that each buyer doesn’t have to record the transaction.
Raymond cited Iowa law that requires a document called an assignment of mortgage to be filed in the county recorder’s office when a mortgage is sold. The MERS system enables banks to avoid that practice and the payment of accompanying filing fees, the lawsuit said.
Bennett ruled that none of the Iowa statues cited in the lawsuit imposes a requirement on the party assigning a mortgage or receiving an assignment to record the transaction.