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Court said the mortgage signed by plaintiffs recognized MERS’ rights to act as nominee

FOR IMMEDIATE RELEASE

CONTACT: Janis L. Smith
Phone: 703-738-0230
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Reston, Va., August 24, 2011— The Superior Court for the State of Rhode Island this week entered its decision in pdf Payette v. Mortgage Electronic Registration Systems, Inc. (79 KB) , writing that “[p]ursuant to [previous decisions in] Porter and Bucci, the Court finds that the assignment here was sound as a matter of law.” The plaintiffs in this case challenged the validity of Mortgage Electronic Registration Systems, Inc.’s (MERS) assignment to co-defendant OneWest, and asked the court to nullify OneWest’s foreclosure sale and the title the foreclosure buyer acquired through the sale.

The Superior Court’s written decision noted that the “Plaintiffs agreed by signing the Mortgage to “mortgage, grant, and convey [the property] to MERS . . . and to the successors and assigns of MERS… Plaintiffs granted the mortgagee interest—which included but was not limited to exercise of the statutory power of sale - i.e., the right to foreclose—to MERS and to MERS’ “assigns,” indicating Plaintiffs’ consent to MERS’ assignment. Moreover, besides the direct permission to assign, Plaintiffs also granted MERS “the right to exercise any and all of [the lender’s] interests, including, but not limited to, the right to foreclose and sell the Property, and to take any action required of Lender including, but not limited to, releasing this Security Instrument.” The Superior Court agreed that MERS’ assignment to OneWest was “permitted by the unambiguous mortgage language.”

The plaintiffs also argued that the Federal Deposit Insurance Corporation’s creation of a receivership for the original lender (IndyMac) severed MERS’ agency relationship as mortgagee and nominee for the mortgage loan. The Superior Court disagreed, and pointing again to the language in the mortgage signed by the plaintiffs, noted that, “the reorganization of IndyMac, like the alleged bankruptcy of the Porter lender, did not affect MERS’ contractual and statutory authority as nominee of the lender… As a matter of contract, the Mortgage signed by Plaintiffs recognized MERS’ rights to act as nominee for IndyMac and for IndyMac’s “successors and assigns.”

The plaintiffs also alleged that the lender’s original appointment of MERS as mortgagee and nominee separated the note from the mortgage. The Superior Court disagreed. Finding “the voluminous and well-reasoned authority on this matter persuasive[,] … this Court finds that no disconnection occurred. Thus, at the time of the foreclosure, the foreclosing entity OneWest exercised all of the rights as assignee of the Mortgage and as holder of the Note.”

The Superior Court also noted that courts have widely held that homeowners lack standing to challenge the propriety of mortgage assignments and the effect those assignments, if any, could have on the underlying obligation. The written opinion stated, “This Court agrees and finds that Plaintiffs do not have standing to attack the foreclosure on these grounds. The rationale of excluding homeowners/debtors from interfering with legitimate commercial transactions between financial institutions is entirely consistent with this Court’s determination that the commercial transfers of the Note and Mortgage, to which Plaintiffs agreed, were entirely lawful.”

“The Rhode Island Superior Court’s ruling is consistent with the finding of many other courts that have upheld MERS’ role as nominee for the lender, its successors and assigns,” said Janis L. Smith, MERSCORP’s Vice President for Corporate Communications. “The ruling also upholds MERS’ business model, confirming that when a borrower signs the mortgage naming MERS as mortgagee, the borrower legally gives MERS the right to assign the mortgage and to take action on behalf of the owner of the loan.”

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Reston, Va., August 15, 2011—In pdf Harris v. America’s Wholesale Lender (344 KB) , Macomb County Circuit Court Judge John C. Foster ruled in favor of the defendant’s motion for summary judgment, finding that the plaintiff had granted Mortgage Electronic Registration Systems, Inc. (MERS) the right to assign the mortgage.

In his decision, Judge Foster wrote, “[p]laintiff…has admitted by way of her signature granting MERS the Mortgagee, and Plaintiff expressly granted MERS the right to assign the mortgage.” Judge Foster also ruled that the plaintiff’s citation of pdf Residential Funding v. Saurman/Bank of New York v. Messner (62 KB)  does not apply because MERS was not the foreclosing party.

“In Saurman, the sole issue … was whether MERS, as mortgagee, but not noteholder, could exercise its contractual right to foreclose by means of advertisement,” Judge Foster wrote. “But, in the case at bar, MERS was not the foreclosing party.”

“Judge Foster’s ruling is consistent with the finding of other courts that have limited the applicability of the Saurman ruling,” said Janis L. Smith, MERSCORP Vice President for Corporate Communications. “The ruling also upholds MERS’ business model, confirming that when a borrower signs the mortgage naming MERS as mortgagee, the borrower legally gives MERS the right to assign the mortgage or to act on behalf of the owner of the loan.”

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Multiple rulings state MERS has authority to foreclose

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
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Reston, Va., August 12, 2011—Oregon Federal District Court Judge Michael Mosman this month issued three separate rulings that affirm the role of Mortgage Electronic Registration Systems, Inc. (MERS) to act as deed of trust beneficiary in Oregon.

In his ruling in pdf Beyer v. Bank of America (144 KB)  (Aug. 1, 2011), Judge Mosman dismissed the plaintiff’s wrongful foreclosure complaint, which alleged that MERS is not a proper deed of trust beneficiary. Judge Mosman found that MERS met the definitional requirement of “beneficiary” under Oregon’s Trust Deed Act because the trust deed “grants MERS all powers necessary to be a beneficiary.” The judge cited the section of the deed of trust that grants MERS the right to act on behalf of the lender, and noted that MERS’ role as beneficiary does not change the borrower’s rights and obligation to pay the loan. Judge Mosman found that this grant of power to MERS “is consistent with…Oregon statutes and policy, and the intent of the parties….” Finally, Judge Mosman ruled that the plaintiff’s contention that the promissory note should have been presented during a non-judicial foreclosure is “meritless,” because Oregon law governing non-judicial foreclosure doesn’t require the presentation of the note.

In pdf Barker v. GMAC Mortgage (2.23 MB)  (Aug. 3, 2011) and pdf Neilson v. Wells Fargo (75 KB)  (Aug. 8, 2011), the plaintiffs in each case were seeking preliminary injunctions to stop non-judicial foreclosures based on the allegation that MERS cannot be a proper trust deed beneficiary. Citing his Beyer opinion and order, Judge Mosman found that both plaintiffs failed to show a likelihood of success on the merits of their claims.

“MERS is a proper beneficiary, as evidenced by the Deed of Trust, and has the right to exercise those steps necessary to recover the debt owed to the lender…” wrote Judge Mosman in the Neilson decision.

“The court’s ruling in all three of these cases affirms that MERS’ role as trust deed beneficiary is legitimate under Oregon law,” said Janis L. Smith, MERSCORP Vice President of Corporate Communications. “The Beyer decision also emphasizes that MERS’ role as beneficiary doesn’t change borrower’s rights or their obligation to make mortgage payments as agreed.”

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U.S. Fourth Circuit Court of Appeals issues multiple rulings

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, Va., August 11, 2011—The U.S. Fourth Circuit Court of Appeals recently affirmed multiple trial court decisions that recognizes the right of Mortgage Electronic Registration Systems, Inc. (MERS) to initiate foreclosure and assign deeds of trust in Virginia.

In pdf Larota-Florez v. Goldman Sachs Mortgage (45 KB)  (4th Cir. aff’d., July 28, 2011), the District Court held that Litton Loan Servicing (Litton) had the right to foreclose for three independent reasons: (1) it serviced the loan, (2) it received an assignment of the deed of trust from MERS, and (3) it held the note endorsed in blank. On appeal, the plaintiff questioned whether MERS had the authority to assign the deed of trust, and the Fourth Circuit responded by affirming the lower court’s decision, stating that “[w]e have reviewed the record and find no reversible error.”

In pdf Pazmino v. LaSalle Bank (10 KB)  (4th Cir. aff’d., July 29, 2011), the trial court held that the deed of trust authorized MERS to foreclose on the property if the plaintiff defaulted on the loan. In its decision, the District Court stated that “[u]nder the terms of the Deed, MERS has two roles: beneficiary and nominee for Lender. By signing the deed, Plaintiff agreed that MERS, as nominee for Lender and Lender’s successors and assigns, had the right to foreclose.” The trial court also “recognized that MERS could take any action required of Lender,” and rejected the plaintiff’s allegation that the trading of pieces of the note on the secondary market split the deed of trust from the note and made the note unenforceable. The District Court also rejected the plaintiff’s contention that only the original lender (or an appointee of the original lender) could enforce the terms of the note.

In pdf Tapia v. U.S. Bank (24 KB) (4th Cir. aff’d, August 1, 2011), the appellate court affirmed the District Court’s decision to dismiss the case, and affirmed that MERS has the authority to foreclose under Virginia law. Of particular note in the District Court’s ruling is that the “show me the note” claims popular in many states are contrary to Virginia’s non-judicial foreclosure laws.

“With these multiple rulings, Virginia’s Fourth Circuit Court has clarified and upheld MERS’ role as beneficiary and nominee for the lender under the terms of the deed of trust,” said Janis L. Smith, MERSCORP Vice President for Corporate Communications. “The court also recognized that MERS has the right to assign the deed of trust, and even though MERS, as a business decision, no longer forecloses, MERS has the authority to foreclose under the laws of the Commonwealth.”

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    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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