Large banks and Merscorp may charge excessive fees during foreclosure.

Investigation and pending class action against Merscorp, Inc. and Mortgage Electronic Registration System, Inc. (collectively 'MERS'), and its controlling shareholders, Citigroup Inc., Countrywide Financial Corporation, Fannie Mae, Freddie Mac, GMAC Residential Funding Corporation, HSBC Finance Corporation, JPMorgan Chase & Co, Washington Mutual Bank, and Wells Fargo Bank, to recover costs, fees and expenses improperly collected by MERS and its agents in the enforcement and foreclosure process.

The investigation concerns allegations that the defendants' conduct in overcharging and/or directing the for costs and expenses, including attorneys' fees, in connection with enforcement of certain mortgage instruments between September 20, 2001 through and including the present (the "Class Period"). On most mortgages, MERS is listed as the mortgagee of record in the county land records. The banks are members of MERS and assign the mortgages to MERS so that county land records do not have to be updated each time a mortgage is sold and resold. MERS allows a secondary mortgage market to thrive in the absence of local filing requirements and notifications to borrowers. MERS maintains a database of the beneficial owners and works with the banks as agents/loan servicers but does not provide updated information to the borrowers. It is alleged that the defendants collected and continue to collect improper costs, fees and expenses, including attorneys' fees in excess of the amounts actually incurred or that were obligated to be paid in connection with enforcement and foreclosure proceedings. Under the mortgage agreement, lenders are strictly limited to their actual costs, fees and expenses that were actually incurred or obligated to be paid in connection with any enforcement proceedings. However, defendants have been routinely overcharging for attorneys' fees that have not been incurred in addition to such things as clerk filing fees, service of process fees, statutory clerk fees, late charges, delinquency fees, appraisal fees, recording fees, unspecified foreclosure fees and costs, administrative fees, escrow fees, and interest charges. Often, these charged fees and expenses were not actually incurred by defendants and/or were incurred at lesser amounts than were billed to and paid.