Nye Lavalle

The foreclosure scandals that dominate headlines today could have been averted had Fannie Mae paid more attention to one foreclosed homeowner, according to the New York Times.

Nye Lavalle, a well-to-do business professional, was preparing to pay off the $100,000 balance in 1988 on a loan he took out for a home in Dallas, Texas. But Lavalle found discrepancies in the paperwork that inflated his bill by $18,000. He refused to pay his loan servicer, and endured a long, and ultimately unsuccessful, legal process to fight the charges. In 1995 he lost the home. [more]

AG Eric Schneiderman

[Updated at 1.30 p.m.] Attorney General Eric Schneiderman has filed a lawsuit against some of the nation’s largest banks charging that the use of a national Mortgage Electronic Registry System called MERS has led to deceptive and fraudulent foreclosure filings in New York state and federal courts, his office announced today.

The lawsuit alleges that, as a result of the system, employees and agents of Bank of America, JPMorgan Chase, and Wells Fargo have submitted court documents containing false or misleading information that made it appear that the foreclosing party had the authority to bring a case when it didn’t. The system has also made it impossible for the general public to reach property transfers through public records, as the information is now stored on a private database. [more]

Bank of America is getting slapped with another lawsuit by Dallas County, that if successful could be a harbinger for many similar suits to come, Bloomberg News reported. Meanwhile, according to Reuters, the bank — the largest in America — is selling off $880 million of U.S. real estate assets to a group of investors comprised of Square Mile Capital Management, Invesco and Canyon Capital Realty Advisors.

The lawsuit names BofA and MERS, an electronic system for processing mortgages that acts as the lender’s nominee and becomes the mortgagee, provided that the loan was originated by one of the financial institutions that owns MERS. Those include Citigroup, JPMorgan Chase, the Mortgage Bankers Association, American Land Title Association, Freddie Mac and Fannie Mae…. [more]

Embattled developer Harry Jeremias is facing a new round of litigation for allegedly defaulting on $48 million in loans from Bank of America, used to purchase and renovate a 13-story office tower at 216 West 18th Street. Jeremias, founder of the Harch Group, allegedly defaulted on the loans after the project encountered months of construction delays, multiple stop-work orders from the Department of Buildings and deteriorating safety conditions at the site, according to documents filed Oct. 22 in New York State Supreme Court. Mortgage Electronic Registration Systems, a firm that services the loan on behalf of Bank of America, is asking for a court-appointed receiver, and warning that the building could lose its existing base of tenants without “competent” supervision of the project…. [more]