Schneiderman said that the electronic registry was created by the banks, so that they could quickly buy and sell parts of mortgages as an “end-run” around the public property recording system. With the help of the system, banks could create "deceptive and fraudulent court submissions" so that foreclosures could be done improperly on homeowners. He also said that irrespective of the size of an institution, rules will be enforced vigorously.

 

The suit alleges that the database of MERS, that was created in 1995 to digitalize and centralize the paperwork regarding the selling of loans, was used by the big banks to transfer ownership of mortgage debt without paying government registration fees and record the transactions properly. The suit also claims that the identities of the holders of mortgage debt were hidden from borrowers by the system. The parent company of MERS has refuted the claims of the attorney general.