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FOR IMMEDIATE RELEASE

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

Reston, Va., August 2, 2011—The New York Supreme Court for Suffolk County last week denied the Defendant’s motion to vacate the Defendant’s default in the foreclosure action which now allows the foreclosure to move forward in Deutsche Bank National Trust Company v. Khouloud Pietranco.

Judge Thomas F. Whelan issued a comprehensive overview of the controlling case law, concluding that the “role of MERS, as nominee, is not an impediment to Plaintiff’s standing to bring a foreclosure action, particularly where the borrower expressly agreed without qualification that MERS had the right to foreclose in the event of a default.” Judge Whelan found that “[T]he use of a nominee in real estate transactions, and as a mortgagee in a recorded mortgage, is a long standing practice.” Further, Judge Whelan stated, “Therefore, while the use of a nominee as the equivalent of an agent for the lender is not unusual, what is unusual is the extent various courts will go to limit the contractual role of MERS as a nominee.”

In this case, the borrower challenged Deutsche Bank’s standing to foreclose. Even though the Defendant waived his right to this defense by failing to assert a timely answer, the Court went on to find that Deutsche Bank did have standing because sufficient evidence was submitted to support its standing to foreclose as both the holder of the note and assignee of the mortgage. Judge Whelan did so and noted, “The issues presented here, concerning ownership of the mortgage note and the effectiveness of an assignment of a mortgage executed by MERS, have been the subject of ever-growing and often confusing litigation throughout the State.”

The Court correctly summed up MERS business model, explaining “…that when a lender that holds a note secured by the mortgaged premises, then assigns that note to another member of the MERS System, it need not additionally assign the mortgage because MERS, when it holds legal title to the mortgage lien, stands as common agent for any member who holds the note. As a matter of contract, under the MERS operating agreement, MERS becomes the agent for the new principal, the next purchasing member, each time there is a transfer.” The concluding statement of the Court is “[T]he fact that MERS has developed a system pertaining to mortgage transactions that challenges our traditional assumptions concerning real property law does not automatically render its actions illegal or void. It is a fundamental principle that the courts should not interfere with the contractual rights set forth in a mortgage instrument.”

“The Court’s detailed analysis of New York case law provides a useful primer in support of MERS’ business model,” said Janis Smith, MERSCORP Vice President of Corporate Communications. “This decision should help address and clarify issues for others who still express confusion over how MERS works in the mortgage industry.”

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FOR IMMEDIATE RELEASE

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

Reston, Va., July 29, 2011— In Charles Smith v. Bank of America, N.A., the California Superior Court for Fresno County ruled that a deed of trust naming Mortgage Electronic Registration Systems, Inc. (MERS) as beneficiary gives MERS the authority to foreclose as a nominee, or as an agent of the lender. In a written order, the court dismissed the plaintiff’s claim without leave to amend and recognized that the plaintiff granted MERS the right to foreclose in their contract and therefore their argument “that MERS cannot initiate foreclosure proceedings is meritless.”

In the complaint, the plaintiff argued that MERS was not a valid beneficiary and could not foreclose or assign the deed of trust without demonstrating ownership of the underlying promissory note. The Court, citing to the California Court of Appeals case, Gomes v. Countrywide Home Loans Inc., found MERS standing to foreclose did not depend on whether MERS is deemed to be the beneficiary because it is sufficient that MERS is acting as a nominee and thus an agent of the lender.

“We’re pleased that the court in Charles Smith v. Bank of America, N.A. recognized MERS’ role as nominee for the lender, as well as our legal authority to act on behalf of the lender or owner of the loan,” said Janis Smith, MERSCORP’s Vice President for Corporate Communications. “The role of nominee is fundamental to our business model, and the decision importantly notes that the borrowers agreed to MERS’ authority when they executed the deed of trust.”

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Michigan statute allows the servicer of a MERS mortgage to foreclose by advertisement

FOR IMMEDIATE RELEASE

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

Reston, Va., July 28, 2011—The United States District Court for the Eastern District of Michigan, Southern Division, this week granted the defendant’s motion to dismiss in Carl v. BAC Home Loans Servicing, LP. In their complaint, the plaintiffs claimed that a recent decision by the Michigan Court of Appeals in Residential Funding Co., LLC v. Saurman, cast doubt on the legality of the foreclosure of their property.

In the opinion and order granting the motion to dismiss, Chief Judge Gerald E. Rosen wrote, “the decision in Saurman is unavailing to Plaintiffs in any event,” noting that “[t]he foreclosure proceedings in this case were instituted by the defendant, not MERS.” Citing Mich. Comp. Laws §600.3201(1)(d), Judge Rosen also noted, “The same Michigan statute relied upon in Saurman to conclude that MERS lacked the requisite interest to pursue foreclosure by advertisement expressly provides that the “servicing agent of the mortgage” may pursue foreclosure by advertisement.” The defendant, BAC Home Loans Servicing, LP, commenced a foreclosure by advertisement proceeding and subsequently purchased the plaintiff’s property at a sheriff’s sale in 2010.

“We’re happy to see another decision limiting the applicability of the Saurman decision. Many people were led to believe that courts will reconsider and overturn any foreclosure by advertisement that involved a MERS mortgage, but Saurman just isn’t applicable across the board,” said Janis Smith, MERSCORP Vice President of Corporate Communications. “It’s very troubling – and unfortunate – that struggling families who’ve lost their homes to foreclosure have been advised to file costly litigation that ultimately results in disappointment.”

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MERS’ status as beneficiary under deed of trust continues for subsequent note-owners

FOR IMMEDIATE RELEASE

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

Reston, Va., July 28, 2011— The United States District Court for the District of Utah, Central Division, earlier this week dismissed the plaintiff’s complaint with prejudice in Granderath v. M&T Mortgage, and upheld MERS’ role as beneficiary under deeds of trust in Utah. In his opinion, Judge Ted Stewart wrote, “this Court has repeatedly held that MERS has the ability to act as a beneficiary, conduct foreclosure proceedings, and make assignments of deeds of trust.” In support, the Court referred to its own prior decisions and also cited the recent Commonwealth Property Advocates, LLC v. Mortgage Electronic Registration System, Inc. decision from the Utah Court of Appeals.

The Court noted that the “plain language of the deed of trust in this case specifically recognizes MERS as the beneficiary. Additionally, the court found that “the deed of trust specifically establishes MERS as “a nominee for Lender and Lender’s successors and assigns.”

The Court also rejected Plaintiff’s request to quiet title in his favor based on allegations that the deed of trust and the note were intentionally split by assignments of the deed of trust executed during the securitization process, again referring to its own prior decisions in holding that such securitization and split note claims fail under Utah law.

“Every MERS mortgage agreement – the deed of trust – includes plain language that explicitly designates MERS as mortgagee and gives MERS the authority to act on behalf of the owner of the loan, and borrowers agree to this when they close on a mortgage,” said Janis Smith, MERSCORP’s Vice President of Corporate Communications. “Securitization or sale of the loan to a new owner doesn’t change MERS’ legal right to enforce the terms of the deed of trust and foreclose if a borrower defaults on the obligation to make payments as agreed.”

Other judicial rulings in Utah have been consistent. The Utah Appeals Court in Commonwealth Property Advocates, LLC v. Mortgage Electronic Registration System, Inc. said that “[t]he plain language of the statute does nothing to prevent MERS from acting as nominee for Lender and Lender’s successors and assigns when it is permitted by the Deed of Trust.” In interpreting identical trust deed provisions, the United States District Court for the District of Utah has held numerous times that even in the face of securitization, the provisions of the deed of trust continue to grant MERS “the authority to initiate foreclosure proceedings, appoint a trustee, and to foreclose and sell the property.” See Commonwealth Prop. Advocates, LLC v. First Horizon Home Loan Corp. (D. Utah Nov. 16, 2010); Commonwealth Prop. Advocates, LLC v. Mortgage Elec. Registration Sys., Inc. (D. Utah Sept. 20, 2010); and Burnett v. Mortgage Elec. Registration Sys., Inc. (D. Utah Oct. 27, 2009).

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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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  • MERS® eRegistry

    MERS® eRegistry

    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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  • Information for Homeowners

    Information for Homeowners

    Homeowners today want information about their mortgage loans. Some are facing financial hardship and are struggling with mortgage payments. Information and helpful resources are available. 

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  • Neighborhood Benefits

    Neighborhood Benefits

    Title agents, government agencies and others looking for information about mortgage loans registered on the MERS® System can use Servicer ID or MERS® Link. This public access is often used by local municipalities to identify the servicer responsible for maintaining vacant or abandoned property.

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  • Media Room

    Media Room

    The MERSCORP Holdings, Inc. Media Room provides press contact information and facts about the company and its subsidiary, Mortgage Electronic Registration Systems, Inc. (MERS). These materials are provided to help national, regional and local media better understand the companies' business model and role in the U.S. housing finance system.

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