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10th Circuit Court of Appeals rules MERS has right to foreclose

FOR IMMEDIATE RELEASE

CONTACTS:
Janis L. Smith
Phone: 703-738-0230
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Karmela Lejarde
Phone: 703-761-1274
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Reston, Virginia, December 30, 2011—A three-judge panel of the U.S. Tenth Circuit Court of Appeals in Denver, Colo. unanimously ruled in favor of Mortgage Electronic Registration Systems, Inc. (MERS) in pdf Commonwealth Property Advocates v. MERS (85 KB) . The case was consolidated with two others that were on appeal involving MERS deeds of trust.

“As the district court said, ‘By the clear language of the deeds of trust, MERS has the authority to foreclose and sell the property on behalf of both the original lender and the ‘lender’s successors’,” wrote U.S. Circuit Judge Bobby Baldock for the court. The judges rejected all of the plaintiff’s arguments that MERS lacked the authority under state law to foreclose, noting that the Utah Court of Appeals had previously decided this issue and found that MERS has the ability to foreclose and act as the beneficiary on a Utah deed of trust. The court also noted that the Utah Supreme Court declined to review the Utah Court of Appeals case.

“The 10th Circuit has ruled unequivocally that as beneficiary on deeds of trust, MERS has the authority to foreclose and sell the property on behalf of the note owner,” said Janis L. Smith, MERSCORP’s Vice President of Corporate Communications. “Similar to the 9th Circuit in pdf Cervantes v. Countrywide Cervantes v. Countrywide (99 KB) , the 4th Circuit in pdf Horvath v. Bank of New York (78 KB) , and the 1st Circuit in pdf Kiah v. Aurora (100 KB) , another federal appellate court has upheld MERS’ ability to hold mortgages and deeds of trust.”

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MERS can act on lender’s behalf and perform any action required of the lender

FOR IMMEDIATE RELEASE

CONTACTS:
Janis L. Smith
Phone: 703-738-0230
Email: This email address is being protected from spambots. You need JavaScript enabled to view it.

Karmela Lejarde
Phone: 703-761-1274
Email: This email address is being protected from spambots. You need JavaScript enabled to view it.

Reston, Virginia, December 29, 2011—The Virginia Supreme Court on Dec. 20 rejected the borrower’s petition for appeal in pdf Graves v. Mortgage Electronic Registration Systems, Inc. (593 KB)  (MERS) and let stand the June 29 decision of the Fairfax County Circuit Court, which stated that under the terms of the deed of trust, MERS can exercise the rights of a lender, including appointing a substitute trustee.

“By signing the Deed of Trust, Graves agreed that MERS, as nominee for lender and lender’s successors and assigns, has the right to foreclose on the Property and recognizes that MERS could take any action required of lender,” wrote Circuit Court Judge Jonathan Thacher. “Deeds of trust are treated as contracts, and nothing under Virginia law appears to prohibit a lender and borrower from agreeing to allow a third party, such as MERS, to enforce the terms of a deed of trust.”

The Virginia Supreme Court also left undisturbed the lower court’s ruling that the deed of trust gives MERS the authority to appoint a substitute trustee. As the Circuit Court stated, when the language of a deed of trust such as Graves’ clearly states that MERS is the nominee of a lender and may act on its behalf in the event of a default, statutory requirements regarding the appointment of substitute trustees do not apply.

“The Virginia Supreme Court’s ruling should clarify MERS’ role in the deed of trust,” said Janis L. Smith, MERSCORP’s Vice President of Corporate Communications. “The state’s highest court found no error in the Circuit Court’s ruling that MERS can take any action required of a lender, and that Virginia law does not forbid a lender and borrower from giving MERS the authority to enforce the terms of a deed of trust.”

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Judge rules MERS’ authority is clearly stated in the subject deed of trust

FOR IMMEDIATE RELEASE

CONTACTS :
Janis L. Smith
Phone: 703-738-0230
Email: This email address is being protected from spambots. You need JavaScript enabled to view it.

Karmela Lejarde
Phone: 703-761-1274
Email: This email address is being protected from spambots. You need JavaScript enabled to view it.

Reston, Virginia, December 29, 2011 —The U.S. District Court for the Western District of Washington (Seattle) on Dec. 16 dismissed the plaintiff’s wrongful foreclosure complaint in pdf Bhatti v. Guild Mortgage et al. (68 KB) , ruling that Mortgage Electronic Registration Systems, Inc. (MERS) can act as beneficiary under the deed of trust.

“MERS has the authority to act as beneficiary under the Deed of Trust where such authority is explicitly granted upon execution of the instrument,” wrote U.S. District Court Judge James Robart in his ruling. “In this case, Plaintiffs specifically agreed to MERS’ role as beneficiary under the Deed of Trust they signed. Their allegations that MERS did not have authority do not state a claim for relief.”

Judge Robart also cited to the Ninth Circuit Court of Appeals’ decision in pdf Cervantes v. Countrywide (99 KB)  in further support of his dismissal of the plaintiffs’ claims, noting that MERS’ status and authority are clearly stated in the subject deed of trust, which the plaintiffs signed, and that the plaintiff could not establish that he was misinformed about the MERS System. Judge Robart rejected the plaintiffs’ argument that MERS’ role in the securitization of mortgage loans is improper, writing that “securitization merely creates a separate contract, distinct from the Plaintiffs’ debt obligations under the Note, and does not change the relationship of the parties in any way.”

“We shall add this decision to the long list of rulings in Washington State that affirm MERS’ authority to act as the beneficiary under the deed of trust,” said Janis L. Smith, MERSCORP’s Vice President of Corporate Communications.

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Judges say there is no inconsistency in MERS’ designation as both beneficiary and nominee

FOR IMMEDIATE RELEASE

CONTACTS:

Janis L. Smith
Phone: 703-738-0230
Email: This email address is being protected from spambots. You need JavaScript enabled to view it.

Karmela Lejarde
Phone: 703-761-1274
Email: This email address is being protected from spambots. You need JavaScript enabled to view it.

Reston, Virginia, December 23, 2011—In a unanimous decision, the Court of Appeals of California (First District, Division One) ruled in favor of defendant Avelo Mortgage in pdf Holland v. Avelo Mortgage (242 KB) , finding that Mortgage Electronic Registration Systems, Inc (MERS) was a proper beneficiary and that it can assign the deed of trust.

The court’s opinion, written by Presiding Judge James J. Marchiano, dismissed all counts against Avelo Mortgage. Although MERS was not party to the case, the plaintiff’s complaint alleged that MERS was not a true beneficiary and could not assign its interest in the deed of trust to Avelo, therefore removing Avelo’s authority to foreclose. Judge Marchiano, citing to pdf Fontenot v. Wells Fargo Bank (184 KB) , rejected that argument and wrote that “MERS is the beneficiary of the deed of trust because the deed of trust at issue designates MERS as beneficiary in the document itself.”

The court also rejected the plaintiff’s allegations that the role of MERS was ambiguous. “The record does not support the claimed ambiguity,” wrote Judge Marchiano. “[R]ather, it states that MERS is the beneficiary, acting as a nominee for the lender. There is nothing inconsistent in MERS’s being designated as both the beneficiary and as a nominee, i.e., agent, for the lender.”

“Like many before it, this decision supports and upholds MERS’ role as both the beneficiary and nominee for the lender,” said Janis L. Smith, MERSCORP’s Vice President of Corporate Communications. “The court’s ruling also points out that the clarity of the company’s role is written right into the deed of trust the borrower signed.”

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  • About Us

    About Us

    Today’s financial services industry depends on technological innovations to provide its customers with access to information, increased efficiency and reduced processing costs. MERSCORP Holdings, Inc. owns and operates the MERS® System, a national electronic registry system that tracks the changes in servicing rights and beneficial ownership interests in mortgage loans that are registered on the System.

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    The MERS® eRegistry is essential to the eMortgage world. It is the legal system of record for identifying the Controller (holder) and Location (custodian) for the authoritative copy of a registered eNote. Lenders today are closing eNotes and selling them into the secondary market. Both Freddie Mac and Fannie Mae require that Lenders register their eNotes on the MERS® eRegistry.

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