Supreme Court, Appellate Division, Second Department, New York. MERSCORP, INC.

and Mortgage Electronic Registration Systems, Inc., PetitionersAppellants, v. Edward P. ROMAINE, as Clerk of the County of Suffolk, State of New York, County of Suffolk, State of New York, Respondents-Respondents. No. 2001-04792. Suffolk County Clerk's Index No. 9688/01 February 5, 2002. Reply Brief in Response to Brief of Amici Curiae Federal National Mortgage Association and Federal Home Loan Mortgage Corporation Cahn Wishod & Knauer, LLP, Attorneys for Respondents-Respondents, 425 Broadhollow Road, Suite 315, Melville, New York 11747, (631) 752-1600 *i TABLE OF CONTENTS Preliminary Statement ... 1 Interest of Amici Curiae in this Proceeding ... 1 Conclusion ... 5 TABLE OF CASES AND AUTHORITIES State Cases Mariner's Inn, Inc. v. The Inc. Village of Northport, 39 Misc.2d 951, N.Y.S.2d 297, (Sup. Ct. Suffolk Cty 1963) ... 4 State Statutes CPLR CPLR 8021(a)(4)(a) ... 3 8021(a)(4)(b) ... 3

Preliminary Statement This brief is submitted by the respondents-respondents in reply to the brief submitted as amici curiae by the Federal National Mortgage Association ("Fannie Mae") and Federal Home Mortgage Corporation ("Freddie Mac") pursuant to the permission of the Court. The brief of the amici was served upon counsel for the petitioners-appellants by ordinary mail on January 25, 2002 and this reply is submitted within 15 days thereafter in accordance with the Court's order. Interest of Amici Curiae in this Proceeding Notwithstanding the self-serving statements of the two amici, heavily imbued with references to their performance of "a vital public purpose," and "opportunities for home ownership and affordable rental housing throughout the nation," the mission and performance of these two federal agencies are not at issue, and, more to the point, the amici have openly conceded that they have an interest in the appellants' success because they are members, and *2 their officials double as directors, [FN1] of the appellants Merscorp., Inc. and Mortgage Electronic Registration

Systems, Inc. The amici have no interest in preserving the sanctity of the long-established and traditional New York recording system for instruments related to real property, betray no familiarity at all with New York law, and have simply submitted their brief in a transparent attempt to influence or "strong arm" the Court by creating an appearance that the federal government establishment has an interest in this case. The federal statutes cited by the amici have no relevance to New York's recording system. FN1. See, Affidavit of Richard Amatucci, sworn to May 22, 2001, and Mark Fleming sworn to May 23, 2001, submitted to this Court in support of the appellants' motion for a stay, pending appeal, of the Order appealed from. With all due respect, this Court should not be influenced by such specious considerations, but should give far greater credence, if not deference, to Informal Opinion No. 2001-2 of the Attorney General of the State of New York the chief legal officer of the State (285) [FN2], a public official completely knowledgeable with respect to the New York recording statutes at issue here. Indeed, the issues addressed by the Informal Opinion, upon which the respondent Romaine and a number of other county clerks in New York relied (245, 248,251, 308, 314, 316, 321), are the very issues that are implicated upon this appeal. FN2. Reference is to pages of the Record on Appeal. So, to the extent that the amici argue that the Suffolk County Clerk has failed to comply with New York law (Amicus Brief at 6), their conclusory statements should be ignored, for they add nothing to the arguments made by appellants' counsel. Moreover, the statement of the amici (Amicus Brief at 5), that the Mers instruments do not "fundamentally change" how the mortgage industry operates nationwide is, at least as far as New York is concerned, untrue. We *3 have set forth at pp. 8-18 of Respondents' Brief a number of ways in which the Mers system does fundamentally change the New York recording system, depriving the public of notice of all interests in real property to which the public is entitled. To the extent that the amici argue that the actions of the respondents under New York law will cause irreparable harm, the only irreparable harm that the amici mention is that Mers will be deprived of the opportunity to "streamline costs" (see, Amicus Brief at 7). However, the recording fees that have traditionally been imposed are not for the benefit of a commercial entity, but rather redound to the benefit of the county in which the instruments are recorded (CPLR 8021(a)(4)(a) and also, perhaps more importantly, to the benefit of the State itself. CPLR 8021(a)(4)(b) (fees to be paid to the Commissioner of Education and the New York State Local Government Records Management Improvement Fund). The Legislature's determination to impose fees upon all transfers of interests in real property in the form of recording fees benefits the public, and, in part, finances the maintenance of the recording system in the county clerks' offices. That system was created and is maintained to afford access to the public to all information regarding interests in real property located within this State. The Legislature's longstanding public policy decisions regarding the imposition of recording fees and the application of those fees, as well as regarding the maintenance of a central registry for the recording of real property transactions, should not be interfered with by the appellants. In short, the fact that complying with the recording system requires the payment recording fees to the county clerks - rather than to Mers cannot properly be regarded as a species of irreparable harm to Mers warranting interference by temporary restraining order or preliminary injunction.

*4 Although the amici do not cite the principal case cited by the appellants, Karl's Mariner's Inn, Inc. v. The Inc. Village ofNorthport, 39 Misc.2d 951, 242 N.Y.S.2d 297 (Sup. Ct, Suffolk Cty 1963), they have adopted Mers' legal arguments (See, Amicus Brief at 5), the centerpiece of which is the Mariner's Inn case. The Mariner's Inn case (in which the author of this brief participated as a young lawyer), involved a situation where virtually all direct, convenient, apparent, and longstanding access to a restaurant was cut off by action of the Village so that access would thenceforth be required via a nearly two-mile detour through back roads that were neither well-marked, nor well-lit, nor obvious, so that the existence of the restaurant was threatened. Then-Justice Cohalan's decision was absolutely correct because there was a showing made by the restaurant that a cut-off of direct and obvious access to the restaurant, forcing potential customers to find the restaurant via the circuitous, back-road route, would likely put it out of business. There was an immediate likelihood of irreparable harm, and the balance of the equities tipped decidedly toward the owner of the restaurant. There are no such circumstances here. The only pertinent circumstances here are that Merscorp., a profitmaking corporation, seeks to make its profits by siphoning off moneys that would otherwise be paid to the County Clerk's office for the purposes of supporting both a recording system that is open to all and other necessary public services. In so doing, Mers has closed off access to pertinent information to all except those whom Mers, according to its own commercially-motivated access rules, decides has a valid interest in having the information. *5 Conclusion By reason of the foregoing, and relying upon all of the arguments set forth previously in the Respondents' Brief, the order appealed from should be, in all respects, affirmed.