MINNEAPOLIS — Prosecutors in the Minneapolis-St. Paul area sued a nationwide mortgage registry Friday, saying the company and its member mortgage lenders may have cost Minnesota counties millions of dollars by deliberately failing to register every mortgage transfer with county offices — avoiding to pay required fees.

The lawsuit against Virginia-based Mortgage Electronic Registration Service Inc., or MERS, was filed by prosecutors in Ramsey and Hennepin counties, but it seeks class-action status to allow all Minnesota counties to join.

Prosecutors said MERS is a private company created in 1995 to make it easier for lenders to buy and sell mortgages. Information from the company said it operates an electronic database that tracks changes in who owns interest in residential mortgage loans. MERS is made up of about 3,000 members, including lenders and investors.

Prosecutors said the company and its members failed to record every mortgage assignment, which is the transfer of a loan obligation from one party to another, and pay the associated fees. They said the system works at the expense of the “integrity of our public land records.”

“We are taking action today to reclaim and maintain the public’s right to property records,” Ramsey County Attorney John Choi said in a statement. “Our counties and taxpayers have suffered significant financial loss due to a back-door scheme to privatize our public recording system, and we intend to recover that loss.”

MERS spokeswoman Janis Smith said in a statement that the claims have no merit. She said the company’s system is legal in all 50 states and complies with Minnesota law.

“All MERS mortgages are recorded in the county land records and all required fees are paid,” she said.

The prosecutors did not say how much money they believe counties have lost. The lawsuit says recording fees are about $46 per mortgage and assignment. The damages are tangible, the lawsuit says, but: “The sole variable is the total public moneys illegally withheld from and/or due the counties, which is a commensurate amount purposely hidden by, and thus unknown to all, except the defendants.”

The prosecutors allege that it’s likely MERS deprived states and counties of roughly $7.2 billion nationally.

Similar lawsuits have been filed by local governments across the country. Several cases are pending, and at least six have been dismissed. At least one case has been settled.

According to the Minnesota lawsuit, several lenders and other members of MERS avoided recording mortgage assignments — and thus avoided paying fees — by using MERS as a placeholder in public records. Prosecutors allege MERS made it look like one entity held a mortgage, while in reality many mortgage assignments could be made electronically without ever being recorded with the county.

According to a company fact sheet, MERS claims it is the lien holder in land records whenever transfers take place between members. It said its registry is not a legal system of record or a replacement for public land records. MERS claims: “No interests are transferred on the system; they’re only tracked.”

Hennepin County Attorney John Freeman said in a statement that the public never agreed to a system in which some pay fees and some do not, or a system in which some property record information is in a public database, while other information is private.

Prosecutors also said that because MERS and its members haven’t publicly recorded mortgage assignments, it has been difficult for authorities to identify lenders who have foreclosed on properties, and who might be legally responsible for a property’s maintenance.

The lawsuit seeks an order that would require MERS to record each mortgage assignment with the proper county and pay fees. The prosecutors also want to recover lost revenue.