Attorney General Martha Coakley seems ready to dive deep into the muck of the mortgage crisis, recently announcing her intentions to begin an investigation of banks’ foreclosure practices – particularly the role of the Mortgage Electronic Registration System (MERS).

But the commonwealth’s registers of deeds – arguably the group most affected by the plague of flawed documents and missing assignments – appear leery of the possibility of broadening their limited watchdog role in response to the mortgage crisis.

That might seem a bit strange, because it’s the activism of one of their own that helped prod the attorney general into action in the first place.

Register John O’Brien, who runs the registry of deeds in South Essex County, has been at the forefront of pushing for an investigation of MERS’ practices and the effects of robo-signing and other bank practices on the integrity of land records.

He recently went so far as to have an independent audit conducted of assignments in his county, which he claimed revealed flaws with the vast majority of assignments recorded, including evidence of continued robo-signing. The website for O’Brien’s registry now includes resources to allow homeowners to search records and try to determine if their own mortgages might be among those he alleges to be flawed.

O’Brien’s office has also begun to reject documents he believes are flawed, and to require banks to resubmit those signed by apparent robo-signers – people whose names have been connected to court cases involving robo-signing in other states – along with an affidavit confirming the documents have been properly reviewed.

Slippery Slope

But even as O’Brien welcomed Coakley’s investigation, pronouncing himself “delighted” at the news, his actions have raised eyebrows. The Real Estate Bar Association (REBA), for instance, has requested its own meeting with Coakley to discuss concerns, particularly with regard to O’Brien’s website, a REBA spokesperson told Banker & Tradesman.

Fellow registrars also seem leery.

“If you put the registry in the position of authenticating deeds, that’s going to cause a lot of problems,” said Richard Howe, register of deeds for Northern Middlesex County.

Worcester County Register Anthony Vigliotti agreed.

“As registers, we’re under an obligation to enforce the statutes, and if the document meets the statutory requirement, then we’re required to record the document,” he said. “You rely upon the integrity of the documents, especially now that we’re into electronic recording.”

Vigliotti suggested that if registers began to reject submissions because somebody raised questions about the signatures, it might open the door to all kinds of challenges and fraud.

“How do you know which [purported robo-signer] Linda Green is the real Linda Green?” Vigliotti asked. “How do we know that that bank or whoever did not authorize her to sign her name to the document?”

Even if it turns out that the rules weren’t properly followed when a document was notarized, Vigliotti said, “there’s a statute that says, ‘the fact that the notarization is ineffective does not affect the validity of the document.’ So when title examiners look at it, they will still determine it’s a valid document.”

Judicial Resolution

But other arguments made by O’Brien – including the theory that by registering deeds with MERS, banks have managed to skip out on paying recording fees when a mortgage is transferred – have found more favor.

Norfolk County Register William O’Donnell said his registry has 31,000 mortgages on record with MERS named as a nominee. If those deeds have been reassigned among MERS members without new assignments being recorded, that could mean millions in lost revenue for his county alone.

“This is serious revenue to the commonwealth of Massachusetts – and potentially you have MERS not paying recording fees on assignments, that’s something that should be looked at,” O’Donnell said.

All agreed that an investigation would go a long way to clearing up some of the lingering issues over how to handle flawed documents.

“I think we’ve got to look into whether there was any criminal intent involved, or whether it was sloppiness that’s involved here,” said Vigliotti. “So I think [Coakley has] got to do her investigation to solve this issue of whether documents should be accepted or not accepted.”

Howe, too, said he commended O’Brien “for taking the lead,” on these issues. But he also said that only the courts can truly decide the issue – not a lone register.

“MERS has been around for 12 or 15 years, and when things were going great, nobody questioned it,” said Howe. “I welcome a judicial resolution of the issue.”