MADISON - ST. CLAIR RECORD

St. Clair County Associate Judge Vincent Lopinot on Tuesday denied a motion to stay litigation against MERS  (Mortgage Electronic Recording System) .

MERS had sought to stay proceedings due to an ongoing case in federal court which it claims is “substantially similar."

St. Clair County State’s Attorney Brendan Kelly’s office sued MERS and several major banks in May alleging they created a shadow mortgage recording system that effectively eliminates the ability to track the purchase and sale of properties through the traditional public records system.

“There’s no issue of duplicity,” argued Paul Slocomb, special assistant state’s attorney on behalf of the County at a hearing in Lopinot's court. “Now we have a situation to stay a case that turns comity on its head.”

He argued that the case at issue is a state matter that should be decided in state court.

“Let’s say the federal case goes to federal court," Slocomb said. "The reality of obtaining complete relief in a foreign jurisdiction will not happen here. These guys can cut and paste all day long and submit a motion to dismiss in a week, and it won’t cost their clients anything.”

After hearing discussion for about a half hour, Lopinot announced the motion to stay was denied.

He ordered defense counsel to present a briefing scheduling order on a pending motion to dismiss within 14 days. 

The St. Clair County suit, in addition to MERS, names as defendants: Bank of America, CCO Mortgage Corp., CITI Mortgage, Corinthian Mortgage Corp., Everhome Mortgage Co., GMAC Residential Funding Corp., Guaranty Bank, HSBC Finance Corp., Suntrust Mortgage, Wells Fargo Bank, WMC Mortgage Corp., Bank of O’Fallon, Compass Mortgage, First Collinsville Bank, FirstCo Mortgage Corp., First County Bank, Mid America Mortgage Services of Illinois, Mortgage Services III, Midland States Bank, Peoples National Bank, Commerce Bank, Regions Bank and UMB Bank.

The County claims the defendants’ method of recording – kept in a private database maintained by MERS – is “unreliable and inaccurate.”

The suit claims the system set up by MERS allows financial institutions to avoid transparency in transfer of property and to evade county recording fees which every other citizen has to pay.

Defense attorney Tom Panoff, who represents CITI Mortgage, had no comment on the case as he left the courtroom.

St. Clair County case number 12-L-267.