Three Texas counties, including the two that contain Dallas and Houston, were rebuffed on Thursday in their effort to bring a class action on behalf of all Texas counties against Bank of America Corporation and Mortgage Electronic Registration Systems Inc. The three counties accused BofA and MERS of using an electronic registry to avoid paying nearly $100 million in mortgage filing fees. But a U.S. district court judge in Dallas ruled that certifying a class would mean that other Texas counties would automatically join the suit, which they can’t do under state law.
MERS is facing several similar suits throughout the country accusing it of using its registry to cheat various local governments out of billions of dollars in mortgage registration fees. MERS was created by several banks, including BofA. Its system was designed to facilitate mortgage-backed securities transactions by allowing financial institutions to bypass the offices of county recorders and the fees that these offices charge every time that a mortgage is moved into and out of a security.
