Consumer Finance Insights
May 31, 2017

Kentucky AG Announces Home Loan Protections in Connection with Settlement with Mortgage Recording Company

On May 25, 2017, Kentucky Attorney General Andy Beshear (“Kentucky AG”) announced steps it is taking to provide guidance to Kentucky homeowners whose banks use online mortgage recording databases​ instead of traditional public land records to track land ownership.  The Kentucky AG has provided county clerks with information to post in their offices to promote transparency with citizens seeking online home mortgage details.

These steps stem from the $2.8 million settlement the Kentucky AG announced in late February with a national mortgage recording company over claims that the company violated the Kentucky Consumer Protection Act when it named itself as the mortgagee in public land records, concealing the identity​ of the banks that actually owned the mortgages.  According to the Kentucky AG, the company allegedly failed to monitor the conduct of its member banks, foreclosed on mortgages in the name of the company instead of the actual owner or servicer of the mortgage, assigned mortgages after foreclosure proceedings had started, and failed to make sure that data in the system was accurate.

The settlement did not preclude banks from continuing to use the mortgage recording system, but it does put in place requirements and potential penalties to be levied against the company for any future infractions.  As an example, if the company files a foreclosure in its own name in Kentucky, it will have to pay the Commonwealth $10,000.