The counties contend the system hides who owns loans, often by listing only
In extreme circumstances, that could mean homeowners are left in the dark about who owns their loans and would have no public records to turn to try to defend their homes against foreclosure, Gruber said.
"You're talking about anticipating the worst-case scenario," he said. "Your mortgage company is entitled to foreclose on the loan (if its agreement isn't met), and if you don't know who has that, you could find yourself in big trouble."
The company also could have sidestepped several hundred thousand dollars in local Register of Deeds' filing fees for recording transactions on deeds. Lawsuits against
Instead, the counties contend the
The counties seek unspecified compensatory and punitive damages, along with a court order for
Defendants also include
Attempts to reach the defendants this week were unsuccessful.
However, that doesn't immediately create problems for consumers -- they will still know who is servicing their loan and who to make payments to within the
The system instead has cracks that could leave people in extreme circumstances out of the loop on their mortgage. If their new bill is delivered to the wrong address or they're sick in a hospital and miss a payment, they cannot use public records to find who they are in debt to, Gruber said. However unlikely, the counties want to plug those recording holes, he added.
"When you're dealing with somebody's home, which is usually the biggest investment anyone will make in their life, you don't want to take any chances with that," Gruber said.
Last month, the defendants attempted to move the case to federal court, but U.S. District Judge
Now the state's business court will consider the defendants' request to hear the case there later this year. Scheider said he has not decided whether to challenge that request or argue to keep the case in the 14th Circuit.
"Wherever we end up, we're still entitled to a jury trial in the individual counties, and we want this to be heard by a group of borrowers," Scheider said.
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