By Chris Bruce
Oct. 31 — The U.S. Supreme Court let stand a Connecticut Supreme Court ruling requiring Mortgage Electronic Registration Systems Inc. (MERS) to pay higher recording fees in that state, opening the door for similar action by other states ( MERSCORP Holdings v. Malloy, U.S., No. 15-cv-01538, cert. den. 10/31/16 ).
In February, the Connecticut court upheld amendments to state law that require MERS — a private company that manages a major mortgage registration database — to pay recording fees that are roughly three times higher than other mortgagees.
In June, MERS asked the U.S. Supreme Court to hear its appeal, backed by banking and mortgage groups that said other jurisdictions might enact similar laws if the Connecticut decision was allowed to stand.
In a statement, MERSCORP Holdings spokeswoman Janis L. Smith cautioned against reading too much into the court's Oct. 31 action. “The denial of our Petition does not mean that increases in recording fees only applicable to MERS documents will be deemed constitutional in other states or attempts to increase fees by other states will go unchallenged.”
At issue is a two-tiered Connecticut system governing filing fees that parties to home mortgage loans must pay to record mortgage documents in public land records offices. In 2013, Connecticut legislators amended the law to require higher fees for any mortgage nominee operating a national database.
MERS, saying it was clearly targeted by the 2013 amendments, said the law violated equal protection guarantees of the U.S. and Connecticut constitutions, and the U.S. Constitution's dormant commerce clause. The Connecticut Supreme Court disagreed.
MERS, which has faced numerous lawsuits in recent years that challenge the validity of its registration system, petitioned the U.S. Supreme Court, with support from the Mortgage Bankers Association and other trade associations.
In a July brief, the trade groups said the ruling, unless overturned, would leave other states “free to arbitrarily impose substantially greater recording fees” simply because the loans are registered on a national registry.
That would mean “discriminatory increases” in other charges imposed on lenders, the trade groups said.
To contact the reporter on this story: Chris Bruce in Washington at firstname.lastname@example.org
To contact the editor responsible for this story: Mike Ferullo at email@example.com
Copyright © 2016 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)