Company avoids document fees

February 3, 2013 / The Sunday Sun - Brianne Tolj

Alvie and Julie Campbell stood in front of the log cabin exterior of their Coupland home Thursday morning, glancing over the their house and seven acres of land.

"It was supposed to be our dream home and it became a nightmare," Mr. Campbell said.

After years of battling banks and searching to locate the owner of their mortgage loan, Alvie and Julie Campbell's Coupland home was foreclosed on and sold in 2010. (Photo: Brianne Tolj)

The Campbells purchased what they were told was a brand new home in October 2004, but within months after moving in, they realized the structure of the home -- and their investment -- was unsound.

A year later the home was deemed uninhabitable and the Campbells began a long battle with the home manufacturer (Cavco).  Over the course of several years, they learned that Wells Fargo was no longer the owner of the mortgage note.  It had passed on to another bank, but no one could tell the Campbells which bank.

That sparked the question they still don't have an answer for: What bank were they paying?

A partial answer emerged in Tuesday's meeting of the Williamson County Commissioners Court, when County Clerk Nancy Rister and Austin-area attorneys revealed that a national company that tracks mortgage loans avoided county fees for filing mortgage documents.  The result is that homeowners like the Campbells can't determine who owns the mortgage on their home.  

Many Williamson County residents and millions of people across the country are not trying to figure out what they can do about it.  Some of them have already lost their homes.

The Campbells were foreclosed on in 2010.

Attorneys blame company

Since the presentation of a property records audit to the county commissioners Tuesday, numerous residents have been calling to explain their own conflicts with mortgage lenders, some of which have led to foreclosure, Ms. Rister said.

The Audit, conducted by local attorneys, examined over 1500 mortgage documents that were filed with Williamson County in the past two years.

The attorneys concluded that the source of the problem is a national electronic database, Mortgage Electronic Registration System (MERS), which was created in 1996 by several major banks to track the sale and transfer of mortgages, the report said.  MERS is owned by MERSCORP Holdings, Inc.

MERS was created by banking corporations as a way to curb the fees they were paying to record documents with county clerks, said Kate Berry a reporter for American Banker.

From 2004 until 2012, Williamson County didn't receive nearly $1 million in potential revenue because MERS avoided paying those fees.

"The banks are so 

sloppy that they

would say that it was recorded with MERS but no one at the bank went into the MERS system and registered some of the loans."


Kate Berry

American Banker reporter

The sale and transfer of mortgages occurs frequently, and because the MERS tracking system is so poor and many of the changes were not registered with the respective counties, homeowners were not kept up to date on who actually owned their loan Ms. Berry said.

"The banks are so sloppy that they would say that it was recorded with MERS but no one at the bank went into the MERS systems and registered some of the loans," Ms. Berry said.  "The MERS system itself never actually worked properly."

As a result of loans frequently changing hands and a lack of record keeping, many homeowners who had continued to send payments to their mortgage servicers. the middle-man between the homeowner and the owner of the loan received foreclosure notices and could not track down the loan owner.

The record keeping in this private MERS database is so poor that no one knows who owns the note," Ms. Rister said.


Another fraudulent violation identified by the audit is robosigning, or signing off on documents without reading them.

And it was suspicious signatures on WilCo documents that led Ms. Rister to ask for an audit, she said.

The banks hired people to consistently sign foreclosure documents, stating that the information was correct when sometimes it was not and no notary was present, Ms. Berry said.

In April 2011, the U.S. Department of the Treasury warned MERS, among other companies, about their robosigning practices.

Williamson County will now decide if it would like to pursue legal action against MERS in retaliation for the loss of $1 million in unrecorded funds.

The County Attorney's Office, County Judge Dan Gattis and Ms. Rister will meet Monday to discuss the possibility of joining lawsuits already filed in Dallas and San Antonio or filing a lawsuit of their own.

   "This will take years and years to fix," Ms. Rister said.