Chesco sues banks over mortgage recording fees

Chester County is the latest government in the region to sue some of the nation's largest banks to recover millions of dollars in recording fees for mortgage assignments.

The Chester County Recorder of Deeds filed a lawsuit Oct. 10 against several banks, including JPMorgan Chase, Wells Fargo, Citibank, and Bank of America, in County Court.

The county says the banks used a members-only electronic registry system, created by the banking industry, to track mortgage assignments among themselves. Using Mortgage Electronic Registration Systems, the banks circumvented the Recorder of Deeds Office and avoided paying recording fees, said the recorder, Richard T. Loughery.

"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," Loughery said in a statement.

Residents use recorder of deeds records to verify property title, trace ownership of land, and know who holds their mortgages.

Loughery said the banks owe Chester County as much as $10 million in fees.

Montgomery County filed a lawsuit on behalf of the entire state in federal court Sept. 24 against several banks that used Mortgage Electronic Registration Systems.

"They were the largest banks that have ignored Pennsylvania statutes," said Nancy J. Becker, Montgomery County's recorder of deeds.

Montgomery County filed a class-action lawsuit against Mortgage Electronic Registration Systems and its parent company, Merscorp Inc., in 2011 on behalf of the state's 67 recorders.

A federal judge in Philadelphia ruled in June that the company violated Pennsylvania law. Merscorp, which provides a marketplace for buying and selling mortgages, is appealing the judge's ruling.

Chester County expects its case to go to trial next October.