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Proposed deal would settle 2012 case against mortgage registry.

Multnomah County has negotated a tentative $9 million settlement of a lawsuit alleging fraud against a national mortgage registry company.

Mortgage Electronic Registration Systems Inc. was used by banks to bypass public recording requirements and fees, and has been linked to numerous foreclosures nationally. Other lawsuits against MERS have been filed around the country, with mixed results.

The settlement agreement, released under Oregon Public Records Law, is scheduled to go before the board of county commissioners on Thursday, Jan. 7. It does not spell out how much the county will get from the settlement, and the county did not release details of how much will go to the county's outside law firms.

The law firms agreed to take the case on contingency, paid in the event of a victory. D’Amore Law Group did not respond to messages seeking comment. Typically such contingencies can run a third of any settlement.

Attorneys originally filed the case as a $38 million lawsuit against Mortgage Electronic Registration Systems and its parent company MERSCORP Holdings Inc. Last May, the county filed an expanded lawsuit accusing MERS of fraud and seeking damages of $160 million. Though the case began in state court, it eventually moved to federal court, then went to mediation.

“The abuse of the public recording system and failures of the MERS System are not some hypothetical wrong — they are real and have had devastating and long-term effects upon the public recording system and the homeowners who have been its victims,” according to the county lawsuit.

The agreement also resolves claims against several banks, and does not say which of "certain defendants" would pay the $9 million.

It’s also unclear how the settlement, if approved, would be spent. In late 2012, media reports said that former county Chair Jeff Cogen said the money would be used to help county homeowners who were subjected to non-judicial foreclosures involving MERS.

By Nick Budnick
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