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Four Decisions Cite Idaho Supreme Court Decision Affirming MERS’ Rights

FOR IMMEDIATE RELEASE

CONTACT: Jason Lobo
Phone: 703.652.1660
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Reston, Virginia, September 26, 2012— MERSCORP Holdings, Inc. today announced that the United States District Court for the District of Idaho ruled in favor of Mortgage Electronic Registrations Systems, Inc. (MERS) and other Defendants in four (4) different matters.

In each of the rulings below, the Court repeatedly rejected Plaintiff challenges to MERS’ authority to assign mortgages, rights to obtain the original promissory note, assertions that the notes and deeds of trust became “split” due to securitization and unsupported claims of a failure to abide by Idaho’s non-judicial foreclosure statutes. Judges either adopted a Report and Recommendation issued by magistrate judges or directly issued rulings, all citing the Idaho Supreme Court’s pdf Trotter v. Bank of New York Mellon (67 KB)  decision validating MERS’ role and authority as beneficiary to assign mortgages.

  • In pdf Homeyer v. Bank of America, N.A. (1.04 MB) , U.S. District Judge Edward J. Lodge affirmed U.S. Magistrate Judge Candy W. Dale’s recommendation to grant the Defendants’ motion to dismiss. Citing established Idaho case law and Trotter, Judge Dale “concluded that MERS had the authority to assign its beneficial interest in the Deed of Trust to the foreclosing bank” and the Court “rejects Plaintiffs’ argument that Defendants lack the ability to foreclose because they lack standing or must ‘prove’ ownership of the original note.”
  • In pdf Showell v. BAC Home Loans Servicing, LP (546 KB) , U.S. Magistrate Judge Candy W. Dale, again citing Trotter, noted that “a trustee may initiate non-judicial foreclosure proceedings on a Deed of Trust without first proving ownership of the underlying note…”
    Judge Dale further held that “[n]othing in Idaho law prohibits the Lender, in this case, America’s Wholesale Lender, from designating MERS as its nominee or agent in the Deed of Trust.” Lastly, the Court ruled that the Plaintiffs’ note and trust deed were never “split” because MERS acts as agent for the original lender and lender’s successors and assigns and therefore when the underlying note is sold MERS remains beneficiary as nominee for the new note owner.
  • In pdf Williams v. Bank of America, N.A. (991 KB) , U.S. District Court Chief Judge B. Lynn Winmill affirmed U.S. Magistrate Judge Ronald E. Bush’s recommendation to grant the Defendants’ motion to dismiss. Judge Bush found that “[s]ecuritization of the loan does not discharge Plaintiffs’ clear contractual obligation to repay the loan.” He noted that the Plaintiffs’ arguments regarding MERS have been “routinely rejected by courts, including this Court."
    “[T]he fact that MERS is named as the beneficiary does not change the rights or obligations of Plaintiffs with regard to the Property,” Judge Bush wrote. “Plaintiffs are still required to meet their obligations under the loan and, if they fail to do so, the beneficiary of the Deed of Trust may initiate foreclosure, through the trustee, following the procedures set forth by Idaho’s statutes.”
  • In pdf Ohlsen v. Bank of America, N.A. (937 KB) , U.S. District Court Chief Judge B. Lynn Winmill affirmed another recommendation by U.S. Magistrate Judge Ronald E. Bush’s to grant the Defendants’ motion to dismiss largely based on the same legal reasoning and conclusions found in the other cases.

“Idaho case law has been consistently supportive of MERS’ role as beneficiary,” Janis Smith MERSCORP Holdings’ vice president for Corporate Communications said. “The judges were clear that challenges to MERS’ authority to act on behalf of the lender were without merit.”

For descriptions of cases and other materials pertaining to MERS’ business model and role in U.S. housing, please visit www.mersinc.org.

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MERSCORP Holdings, Inc. is a privately held corporation that owns and manages the MERS® System and all other MERS® products. It is a member-based organization made up of thousands of lenders, servicers, sub-servicers, investors and government institutions. Mortgage Electronic Registration Systems, Inc. (MERS) serves as the mortgagee in the land records for loans registered on the MERS® System, and is a nominee (or agent) for the owner of the promissory note. The MERS® System is a national electronic database that tracks changes in mortgage servicing and beneficial ownership interests in residential mortgage loans on behalf of its members.

Three-Judge Panel Rules Borrower' Default caused "Injury," Not MERS

FOR IMMEDIATE RELEASE
Jason Lobo
Phone: 703.652.1660
Email: This email address is being protected from spambots. You need JavaScript enabled to view it.

Reston, Virginia, September 20, 2012—MERSCORP Holdings, Inc. today announced that a three-judge panel of the Washington Court of Appeals, Division One, affirmed this week a lower court ruling dismissing the borrowers' claims of wrongful foreclosure and violations of Washington's Consumer Protection Act (CPA) against Mortgage Electronic Registration Systems, Inc. (MERS).

In pdf Peterson v. CitiBank (145 KB) , the borrowers appealed the trial court's decision dismissing their claims against MERS arguing that their complaint was sufficient to demonstrate a CPA violation and that the trial court erred by granting MERS' motion to dismiss.  The Court of Appeals disagreed with the borrowers' argument and affirmed the trial court's decision.  The Panel cited the recent Washington Supreme Court's Bain v.  Metropolitan Mortgage Group opinion, which explained that to plead a valid CPA claim and prove causality under Washington law, a "plaintiff must establish that, but for the defendant's unfair or deceptive practice, the plaintiff would not have suffered an injury." The Court of Appeals found no facts exist in the present case to support the borrowers' contention that MERS' actions caused them injury.

"It is undisputed that the Petersons defaulted on their loan and that it was this default that led to the foreclosure proceedings," the Panel wrote. "Accordingly, the Petersons have failed to plead facts demonstrating that their alleged injuries would not have occurred but for MERS's actions; regardless of MERS's conduct as the beneficiary under the deed of trust, the Petersons' property would still have been foreclosed upon based on their failure to make payments on the loan."

Judges Ronald E. Cox and C. Kenneth Grosse joined in the opinion of the Court written by Judge Stephen J. Dwyer.

"It is important to note that the recent Washington Supreme Court's Bain opinion provided very specific criteria that must be met to prove violations of the state's Consumer Protection Act.   Both the lower court and the appeals court ruled that these benchmarks were not met by the borrowers," MERSCORP Holdings Vice President of Corporate Communications, Janis L. Smith, said.  "Judge Regina Cahan of Washington's King County Superior Court ruled similarly in pdf Jimenez v Fannie Mae (1.47 MB)  recently."

For descriptions of cases and other materials pertaining to MERS’ business model and role in U.S. housing, please visit www.mersinc.org.

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MERSCORP Holdings, Inc. is a privately held corporation that owns and manages the MERS® System and all other MERS® products. It is a member-based organization made up of thousands of lenders, servicers, sub-servicers, investors and government institutions. Mortgage Electronic Registration Systems, Inc. (MERS) serves as the mortgagee in the land records for loans registered on the MERS® System, and is a nominee (or agent) for the owner of the promissory note. The MERS® System is a national electronic database that tracks changes in mortgage servicing and beneficial ownership interests in residential mortgage loans on behalf of its members.

Court Dismisses Consumer Protection Act Allegations against MERS

FOR IMMEDIATE RELEASE
Jason Lobo
Phone: 703.652.1660
Email: This email address is being protected from spambots. You need JavaScript enabled to view it.

Reston, Virginia, September 19, 2012—MERSCORP Holdings, Inc. today announced that Judge Regina Cahan of the King County Superior Court in Washington State recently ruled in favor of Mortgage Electronic Registration Systems, Inc. (MERS), Fannie Mae and one other defendant, dismissing a borrower’s wrongful foreclosure and Washington Consumer Protection Act (CPA) violation complaint.

In  pdf Jimenez v. Fannie Mae (1.47 MB) , the borrower alleged that the defendants’ actions constitute wrongful foreclosure and violations of the CPA because MERS did not meet the definition of trust deed “beneficiary” under Washington law and therefore the MERS assignment of the trust deed to the foreclosing lender, Fannie Mae was invalid, deceptive and caused the borrower to be evicted after a completed non-judicial foreclosure and trustee sale.

Judge Cahan’s ruling found that the foreclosure was valid under Washington law because Fannie Mae – already the promissory note holder – commenced the foreclosure. As such, Fannie Mae had the authority to enforce both the promissory note and the deed of trust. Regarding the dismissed CPA claim against MERS, Judge Cahan’s ruling affirmed that there was nothing deceptive about MERS’ role as beneficiary in a nominee capacity for the lender and lender’s successors and assigns because of the explicit language found in his deed of trust.

The ruling furthermore agreed with the defendants’ dismissal motion argument that the plaintiff’s “allegations of injury are not sufficient to support a claim under the CPA.” The “injury” suffered by plaintiff was brought on by plaintiff’s own default, and is the agreed upon consequence of plaintiff’s default based on the terms of the contract he signed.

“The foreclosure in this case was initiated by Fannie Mae, which was holder of this borrower’s promissory note. ” MERSCORP Holdings Vice President of Corporate Communications, Janis L. Smith, said. “The foreclosure process was therefore in line with both Washington law and the recent Washington State Supreme Court opinion in Bain and Selkowitz.”

For descriptions of cases and other materials pertaining to MERS’ business model and role in U.S. housing, please visit www.mersinc.org.

###

MERSCORP Holdings, Inc. is a privately held corporation that owns and manages the MERS® System and all other MERS® products. It is a member-based organization made up of thousands of lenders, servicers, sub-servicers, investors and government institutions. Mortgage Electronic Registration Systems, Inc. (MERS) serves as the mortgagee in the land records for loans registered on the MERS® System, and is a nominee (or agent) for the owner of the promissory note. The MERS® System is a national electronic database that tracks changes in mortgage servicing and beneficial ownership interests in residential mortgage loans on behalf of its members.

Three-Judge Panel Thwarts Borrower’s Attempt at “winning a free house”

FOR IMMEDIATE RELEASE
Jason Lobo
Phone: 703.652.1660
Email: This email address is being protected from spambots. You need JavaScript enabled to view it.

Reston, Virginia, September 19, 2012—MERSCORP Holdings, Inc. today announced that a three-judge panel of the United States Court of Appeals for the Fifth Circuit affirmed the July 7, 2011, dismissal of a plaintiffs’ wrongful foreclosure complaint against Mortgage Electronic Registration Systems, Inc. (MERS) and two other defendants.

In pdf Wigginton v. The Bank of New York Mellon (308 KB) , Senior U.S. District Judge A. Joe Fish dismissed the plaintiff’s five-count complaint, which asserted claims of breach of contract, unreasonable collection efforts and defamation based on her belief that MERS’ transfer of its interest in the plaintiff’s deed of trust to the foreclosing lender Bank of New York Mellon (Mellon) and the subsequent foreclosure were unlawful. “Applying Texas law, courts in this circuit have consistently rejected claims based on an allegedly wrongful or illegal foreclosure where the deed of trust specifically grants the defendant a right to foreclose upon the plaintiff’s default,” Judge Fish held. “And the deed of trust, on its face, grants MERS a right to foreclose upon Wigginton’s default, a right Mellon acquired vis-à-vis MERS’ transfer of its interest.”

The Court of Appeals panel found that the District Court’s analysis in dismissing all counts was correct.

“Winning a free house simply because the mortgage lenders sought to use normal means to recover it from a defaulted debtor would indeed be a lucky strike. But such windfalls are the province of the sweepstakes, not of the federal courts,” the Court of Appeals panel wrote in its judgment. “Dr. Wigginton has apparently enjoyed years of free housing while pursuing this meritless litigation.” Chief Judge Edith H. Jones and Circuit Judges Edward C. Prado and Jennifer Walker Elrod joined in the opinion. The Fifth Circuit Court of Appeals includes Louisiana, Mississippi and Texas.

“The Fifth Circuit Court of Appeals’ ruling emphasizes that MERS has legal authority to act on behalf of the lender, including the right to execute the assignment,” MERSCORP Holdings Vice President of Corporate Communications, Janis L. Smith, said. “We continue to emphasize that struggling borrowers are better served by working with their mortgage servicers and seeking appropriate financial counseling, than by attempting to use the judicial system to avoid valid foreclosures.”

For descriptions of cases and other materials pertaining to MERS’ business model and role in U.S. housing, please visit www.mersinc.org.

###

MERSCORP Holdings, Inc. is a privately held corporation that owns and manages the MERS® System and all other MERS® products. It is a member-based organization made up of thousands of lenders, servicers, sub-servicers, investors and government institutions. Mortgage Electronic Registration Systems, Inc. (MERS) serves as the mortgagee in the land records for loans registered on the MERS® System, and is a nominee (or agent) for the owner of the promissory note. The MERS® System is a national electronic database that tracks changes in mortgage servicing and beneficial ownership interests in residential mortgage loans on behalf of its members.

  • 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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