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Two Appellate Panels Sustain MERS’ Authority in the Nonjudicial Foreclosure Process

FOR IMMEDIATE RELEASE

CONTACT: Jason Lobo
Phone: 703.652.1660
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Reston, Virginia, July 23, 2012 – MERSCORP Holdings, Inc. today announced that two three-justice panels within the California Court of Appeal system rejected borrower complaints challenging MERS’ authority and role as beneficiary.

In the Taasan v. Family Lending Services, Inc. et al. decision written by Justice Paul R. Haerle of the First Appellate District, Division Two, the Panel agreed with the March 2011 lower court finding that the borrowers “executed a deed of trust conferring on MERS or any successor in interest the right to exercise the power of sale as the named nominee beneficiary.” Justice Haerle was joined by Justice James A. Richman and Presiding Justice J. Anthony Kline.

The initial complaint and the first amended complaint were largely based on the theory that MERS did not have possession of the promissory note and therefore lacked authority to assign beneficial interest in the deed of trust and promissory note.

“Appellants’ attempt to require a foreclosing entity to have physical possession of the note in order to initiate a nonjudicial foreclosure is also without merit,” Justice Haerle wrote. “Moreover, we note that our colleagues in Division One of this court have also rejected the contention that, because MERS (identified as the lender’s nominee in the deed of trust) did not have possession of the note, it did not have authority to assign it.” Justice Haerle, relying specifically on MERS’ nomination as the beneficiary in the language of the deed of trust, upheld MERS’ right to assign or foreclose, without possessing the promissory note.

The Panel also emphasized in its ruling that the California nonjudicial foreclosure statute in Civil Code sections 2924 through 2924k governs foreclosure in the state, not Uniform Commercial Code, Article Three as argued by the borrower.

Separately, in pdf Skov v. U.S. Bank N.A. (252 KB) , Justice Nathan D. Mihara of the Sixth Appellate District also rejected a borrower contention that MERS lacked authority to execute the notice of default and the assignment of the deed of trust. “We reject her contention,” Justice Mihara wrote. “[s]tatutes and standard legal texts establish that MERS’s execution of the assignment of the deed of trust and its authorization of the notice of default were ‘required’ and ‘necessary to comply with law or custom.’” Acting Justice Eugene M. Premo and Justice Franklin D. Elia joined Justice Mihara in the ruling.

“MERS’ authority to assign mortgages has been upheld in hundreds of lawsuits,” said Janis Smith, MERSCORP’s Vice President for Corporate Communications. “Not only has the notion that MERS doesn’t have authority to assign been routinely rejected as baseless by courts, including multiple courts in the California system, it’s also an ineffective strategy for avoiding foreclosure after default.”

For descriptions of cases and other materials pertaining to MERS’ role and business model 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 approximately 3,000 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(s) 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.

Statement from Janis L. Smith, Vice President for Corporate Communications MERSCORP Holdings, Inc. on the Oregon Court of Appeals Reversal in Niday v. GMAC Mortgage LLC

FOR IMMEDIATE RELEASE

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

Reston, Virginia, July 18, 2012 — We disagree with today’s ruling from the Oregon Court of Appeals’ in Niday v. GMAC Mortgage LLC, et al. Importantly, however, we note that the Appellate decision does not impact judicial foreclosures. Nor does it affect the validity of mortgages or deeds of trust recorded in MERS’ name in Oregon.

The immediate impact of this decision is that MERS® Members will now likely have to proceed judicially with foreclosures, which will ultimately increase costs and be an added burden on the state’s court systems. MERS' validity as beneficiary has been affirmed in 48 prior Oregon rulings, including 30 since this case was filed. We also believe that today’s contradictory ruling will cause confusion in the industry.

We will appeal this decision to the Oregon Supreme Court. We continue to believe the Circuit Court’s November 2010 ruling in Niday was correct and is consistent with the majority of the Oregon federal and state court decisions that uphold MERS’ role as beneficiary.

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

To obtain a copy or copies of any of the judicial decisions above, please contact the This email address is being protected from spambots. You need JavaScript enabled to view it..

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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.

FOR IMMEDIATE RELEASE

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

Reston, Virginia, July 17, 2012 – MERSCORP Holdings, Inc. today announced that Chief Judge B. Lynn Winmill of the U.S. District Court for the District of Idaho upheld Mortgage Electronic Registration Systems, Inc. (MERS) authority to assign its interest in a deed of trust under Idaho law, and dismissed the borrower’s five-count claim of wrongful foreclosure.

In her July 11, 2012, ruling in pdf Cherian v. Countrywide Home Loans, Inc (72 KB) , Judge Winmill found no merit to any of the plaintiff’s claims and granted the defendants motion to dismiss. Despite being more than $127,000 in arrears on his $895,000 mortgage, the plaintiff relied on several theories to allege that the defendants foreclosed improperly and that none of the defendants has any “right, estate, title, lien or interest…in or to the Property.” Cherian asked the court to “quiet title” his property and grant him outright ownership of the property, free of the MERS lien.

Judge Winmill first noted in her decision that Cherian’s failure to show ability or willingness to pay the balance owed on his mortgage loan is fatal to his quiet title claim because “a mortgagor cannot without paying his debt quiet title as against the mortgagee.”

All other claims were similarly dismissed for lack of merit, including allegations that MERS has no authority under Idaho law to assign its interest in the Deed of Trust. “This position has been routinely rejected by the courts, including this Court,” Judge Winmill wrote. “[t]he Court likewise concludes here that MERS had the authority to assign its beneficial interest in the Deed of Trust to U.S. Bank.”

“MERS’ authority to assign mortgages has been upheld in hundreds of lawsuits,” said Janis Smith, MERSCORP’s Vice President for Corporate Communications. “Not only has the notion that MERS doesn’t have authority to assign been routinely rejected as baseless by courts, including the U.S. District Court for the District of Idaho, it’s also an ineffective strategy for avoiding foreclosure after default.”

For descriptions of cases and other materials pertaining to MERS’ role and business model 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 approximately 3,000 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(s) 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.

Panel Affirms Lower Court’s Finding that MERS is a Valid Beneficiary

FOR IMMEDIATE RELEASE

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

Reston, Virginia, July 17, 2012 – MERSCORP Holdings, Inc. today announced that a three-judge panel of the United States Court of Appeals for the Ninth Circuit affirmed the October 25, 2010, dismissal of a plaintiffs’ complaint against Mortgage Electronic Registration Systems, Inc. (MERS) and two other defendants. The Ninth Circuit Court of Appeals includes Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon and Washington.

In pdf Buchna v. Bank of America (965 KB) , the panel affirmed U.S. District Court Judge Mary H. Murguia’s dismissal of the plaintiffs’ complaint. Judges Procter Hug, Jr., Sandra S. Ikuta and Johnnie B. Rawlinson joined in the opinion.

In Buchna, Judge Mary H. Murguia of the U.S. District Court for the District of Arizona granted MERS’ motion to dismiss finding that MERS is a valid beneficiary under Arizona law with the authority to enforce the Deed of Trust. In the lower court decision, Judge Murguia also found no merit to Plaintiffs’ claim that securitization of Plaintiffs’ loan has severed the Note from the Deed of Trust barring any party from initiating foreclosure proceedings. Judge Murguia ruled that these allegations “ignore that the Deed of Trust states that MERS will serve as the nominee for the original lender as well as the original lender’s successors and assigns and has the right to ‘foreclose and sell the property’.” Therefore, MERS is authorized to act on behalf of whichever current entity is the holder of Plaintiffs’ Note.

In affirming Judge Murguia’s order, the Court of Appeals also cited its earlier decision in pdf Cervantes v. Countrywide Home Loans, Inc. (99 KB)  and ruled that the Plaintiffs’ arguments “based on their contention that MERS is not a valid beneficiary also fails to state a claim.”

“The Ninth Circuit Court of Appeals, no stranger to these cases, ruled definitively that the plaintiffs’ claims were meritless,” said Janis Smith, MERSCORP’s Vice President for Corporate Communications. “MERS has legal authority to act on behalf of the lender, including the right to execute the assignment or foreclose, and there is a wide body of case law supporting this fact.”

For descriptions of cases and other materials pertaining to MERS’ role and business model 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 approximately 3,000 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(s) 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.

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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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