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Financial Services Law Insights and Observations

Delaware AG Settles Case Against Electronic Mortgage Registry

Mortgage Servicing State Attorney General

Lending

On July 13, Delaware Attorney General Beau Biden announced a settlement of the state’s lawsuit against a national electronic mortgage registry. The state alleged that the registry system created inaccurate and unreliable records that undermined chain of title in that state. Under the agreement, the registry has agreed to (i) maintain a database that allows homeowners to clearly see who owns the mortgage and who services the loan, (ii) record assignments of mortgages with the county Recorder of Deeds Office before a foreclosure can proceed, (iii) not foreclose in its name for the next five years, (iv) audit its records for accuracy and report results to the Attorney General, and (v) increase oversight and training, including annual examinations of documents signed by employees of its 25 largest members to check the identity and authority of the person who signed the documents. These steps are consistent with those already taken by the registry nationally, and the agreement does not include any monetary payment.