A settlement in a complicated lawsuit in which Dallas County District Attorney Craig Watkins retained high-powered outside lawyers in an attempt to recover tens of millions of taxpayer dollars has died because those lawyers and the county couldn’t agree on legal fees.
After county commissioners kept delaying a vote on the proposed settlement, mostly because of the fee dispute, U.S. District Judge Reed O’Connor threw out the bulk of the lawsuit earlier this month.
Now the attorneys — most of whom are allies of Watkins or the Democratic Party — and the county both are empty-handed. The only satisfied party is the suit’s defendant, Mortgage Electronic Registration System.
“We are very pleased with this development,” said Janis Smith, Merscorp’s vice president for corporate communications. “The scope of this case has been substantially narrowed.”
Merscorp is the parent company of MERS. ...
The suit alleges that MERS — which was founded by Fannie Mae, Freddie Mac and several large U.S. banks in 1995 — was a conduit for buying and selling mortgages by lenders. The suit said MERS avoided paying recording fees to the county when mortgages changed hands, as required by law.To be fair, if the feds had aggressively pursued white-collar offenses after the
The county was seeking to recoup years of lost revenue from those recording fees. Other counties across the nation also filed similar suits against the company. MERS has won many of those cases.
Similar litigation has been greenlighted in Nueces County. Too bad Dallas couldn't get its act together.
CORRECTION: An attorney friend emailed to say, "It isn't really 'derivatives' litigation. That word indicates a securities law case. MERS is about the mortgage industry creating a straw man non profit of sorts to 'hold' mortgages while the notes are traded behind the scenes. The consumer/debtor has no idea -- and no way of confirming -- who really owns the debt they owe. And counties get screwed out of filing fees. Although the liens and notes are changing hands, the county records are not updated." She's entirely correct, I misstated that, should have known better, and regret the error.