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WilCo Homeowners At Risk For Unexpected Foreclosure
Tens of thousands of homeowners in Williamson County could face an unexpected foreclosure at no fault of their own.
County Clerk Nancy Rister paid $12,500 for an audit. It uncovered missing loan documents and fraudulent paperwork putting the ownership of homes at risk.
As of January, there are more than 300 foreclosed homes in WilCo.
Rock Properties realtor Walter Rock has seen a large number in the Teravista neighborhood in Round Rock.
"In a mortgage the bank says if you don't pay you don't stay," Rock said.
However if you do pay, you could still be packing.
Rister blames a Texas Law that changed in 2003. It allowed certain loans to be filed in a national database called Mortgage Electronic Registration System or MERS. However, that did not exempt companies from filing in the county.
"Every time that note is sold, per state law, it's supposed to be recorded in the local county," confirms Rister.
She is now finding out that didn't happen and the county has lost $957,000 in revenue.
"Between 2004 and 2012 I've estimated around 60,000 documents plus have not been recorded that should have been," said Rister.
KEYE TV found out this is more widespread. We uncovered Travis and Hays County are also looking into the issue.
All that can be done is the counties to seek legal action. For now homeowners need to check if all their documents are up to date.
UPDATE: Jason Lobo, Director of Corporate Communications for MERSCORP Holdings, Inc. released the following statement after the story aired -
There is no merit to the allegations from the Williamson County clerk's office. All MERS deeds of trust are registered in the local land records and all recording fees are properly paid by the lender at the time of recording. In Texas the deed of trust does not have to be recorded each time there is a sale or change in servicing if MERS is the named mortgagee. Also, contrary to what the clerk says, the promissory note is never filed with the county (with or without MERS' involvement). That's just not what's done. There are no assignments that follow - no assignments are necessary when transfers occur between MERS members because the lien remains in MERS' name. Since no assignment takes place, there is nothing additional to record. However, when assignments out of MERS' name to a non-member take place, they are recorded in county land records and paid for.
The Chief Justice of the Texas Court of Appeals, Third District, at Austin, ruled as much in a recent case you can find here. The Texas Supreme Court refused to hear a challenge to our business model as well. You can find that here. The U.S. Court of Appeals for the Fifth Circuit (a federal court) provided a harsh assessment of theories against our business model.
WilCo Homeowners At Risk For Unexpected Foreclosure
Tens of thousands of homeowners in Williamson County could face an unexpected foreclosure at no fault of their own.
County Clerk Nancy Rister paid $12,500 for an audit. It uncovered missing loan documents and fraudulent paperwork putting the ownership of homes at risk.
As of January, there are more than 300 foreclosed homes in WilCo.
Rock Properties realtor Walter Rock has seen a large number in the Teravista neighborhood in Round Rock.
"In a mortgage the bank says if you don't pay you don't stay," Rock said.
However if you do pay, you could still be packing.
Rister blames a Texas Law that changed in 2003. It allowed certain loans to be filed in a national database called Mortgage Electronic Registration System or MERS. However, that did not exempt companies from filing in the county.
"Every time that note is sold, per state law, it's supposed to be recorded in the local county," confirms Rister.
She is now finding out that didn't happen and the county has lost $957,000 in revenue.
"Between 2004 and 2012 I've estimated around 60,000 documents plus have not been recorded that should have been," said Rister.
KEYE TV found out this is more widespread. We uncovered Travis and Hays County are also looking into the issue.
All that can be done is the counties to seek legal action. For now homeowners need to check if all their documents are up to date.
UPDATE: Jason Lobo, Director of Corporate Communications for MERSCORP Holdings, Inc. released the following statement after the story aired -
There is no merit to the allegations from the Williamson County clerk's office. All MERS deeds of trust are registered in the local land records and all recording fees are properly paid by the lender at the time of recording. In Texas the deed of trust does not have to be recorded each time there is a sale or change in servicing if MERS is the named mortgagee. Also, contrary to what the clerk says, the promissory note is never filed with the county (with or without MERS' involvement). That's just not what's done. There are no assignments that follow - no assignments are necessary when transfers occur between MERS members because the lien remains in MERS' name. Since no assignment takes place, there is nothing additional to record. However, when assignments out of MERS' name to a non-member take place, they are recorded in county land records and paid for.
The Chief Justice of the Texas Court of Appeals, Third District, at Austin, ruled as much in a recent case you can find here. The Texas Supreme Court refused to hear a challenge to our business model as well. You can find that here. The U.S. Court of Appeals for the Fifth Circuit (a federal court) provided a harsh assessment of theories against our business model.
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