By – Mar 2, 2011 11:21 AM ET
Bank of America Corp., Citigroup Inc. and PNC Financial Services Group Inc. may face added costs or fines after investigators questioned the use of a mortgage database instead of original documents to justify foreclosures.
Earnings at Bank of America, the largest U.S. lender, may suffer materially if using Mortgage Electronic Registration Systems or MERS is found to be invalid, according to a regulatory filing last week. Citigroup and PNC said fines or other penalties may result from investigations into MERS and allegations of faulty foreclosure practices.
“They’re recognizing the writing on the wall, that there are serious problems associated with the basic business model and legal theories of the MERS system,” Christopher L. Peterson, a law professor at the University of Utah in Salt Lake City who has written articles on Reston, Virginia-based MERS, said yesterday.
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