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Panel Affirms U.S. District Court’s Dismissal of Wrongful Foreclosure Complaint

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 13, 2012 – MERSCORP Holdings, Inc. today announced that a three-judge panel of the United States Court of Appeals for the Sixth Circuit affirmed a June 13, 2011, decision by U.S. District Court Judge Sean F. Cox for the Eastern District of Michigan that dismissed a legal challenge to Wells Fargo’s authority to foreclose by advertisement under Michigan law. The Sixth Circuit Court of Appeals includes Kentucky, Ohio, Michigan and Tennessee.

In pdf Hargrow v. Wells Fargo Bank N.A. (89 KB) , the Sixth Circuit panel rejected the plaintiffs’ claims that, among other things, Wells Fargo, as an assignee of MERS, was not entitled to foreclose because it did not own an interest in the indebtedness; and, that the mortgage assignment by MERS to Wells Fargo was invalid because the mortgage could not be assigned without a corresponding assignment of the underlying debt.

“The Hargrows’ sole argument is that the foreclosure by advertisement initiated by Wells Fargo was void because Wells Fargo failed to comply with Michigan Compiled Laws §§ 600.3204(1)(d) and (3),” the panel wrote. The court held that the plaintiffs’ argument “is now foreclosed…,” citing an intervening Michigan Supreme Court decision, pdf Residential Funding Co., LLC v. Saurman (40 KB) , which rejected the validity of this argument. The Sixth Circuit further noted that “The Michigan Supreme Court held that MERS, ‘as record-holder of the mortgage,’ owned an ‘interest in the indebtedness… [that] authorized MERS to foreclose by advertisement under MCL 600.3204(1)(d)’ despite not owning the underlying debt.”

In rejecting claims of a broken chain of title, the Court wrote that the “Hargrows granted MERS the power to assign the Mortgage, and MERS used that power to assign the Mortgage to Wells Fargo. The assignment was recorded in the Washtenaw County Clerk’s Office, creating a clear record chain of title for the Mortgage.” As a result, the Circuit Court of Appeals concluded that “since the chain of title of the mortgage was properly recorded, Wells Fargo as the owner of an interest in the indebtedness had the power to foreclose by advertisement” under the Michigan statute.

Sixth Circuit Judges Karen Nelson Moore, Helene N. White and Carlos F. Lucero, Circuit Judge for the U.S. Court of Appeals for the Tenth Circuit, sitting by designation, joined in the opinion.

“We have seen numerous appellate court decisions over the course of the last several months that affirm lower court rulings in MERS’ favor,” said Janis Smith, MERSCORP’s Vice President for Corporate Communications. “As this panel has made clear, MERS has legal authority to act on behalf of the lender – including the right to execute the assignment or foreclose – and this authority is granted by plain language in the mortgage document signed at closing by the borrower.”

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 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.

FOR IMMEDIATE RELEASE

CONTACTS: Janis Smith
Phone: 703.738.0230 
Email: This email address is being protected from spambots. You need JavaScript enabled to view it. 

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

Reston, VA, July 13, 2012 – “We are pleased to have come to an agreement with the State of Delaware that both serves the best interests of Delaware homeowners and protects the value MERSCORP Holdings brings to its members. The agreed upon measures are consistent with steps we’ve taken nationally to improve offerings to our constituencies and are natural outcomes of our responsiveness to the rapidly changing market-reform environment. With this matter now resolved, MERSCORP Holdings, Inc. and Mortgage Electronic Registration Systems, Inc. (MERS) will continue to provide value to U.S. housing finance, state and local governments and to homeowners.”

A copy of the settlement agreement can be found here.

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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.

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

 

Three-Judge Panel Affirms U.S. District Court Judge’s Dismissal of Wrongful Foreclosure Complaint

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 12, 2012 – MERSCORP Holdings, Inc. today announced that a three-judge panel of the United States Court of Appeals for the Tenth Circuit affirmed the August 31, 2011, dismissal of a plaintiffs’ wrongful foreclosure complaint against Mortgage Electronic Registration Systems, Inc. (MERS) and four other defendants. The territorial jurisdiction of the Tenth Circuit includes the six states of Oklahoma, Kansas, New Mexico, Colorado, Wyoming, and Utah, plus those portions of the Yellowstone National Park extending into Montana and Idaho.

Writing the decision in pdf Tadehara v. Ace Securities Corp. et al. (79 KB) , Circuit Judge Michael R. Murphy rejected the plaintiffs’ claims, including an argument under Utah Code Ann. § 57-1-35. Plaintiffs’ relied upon their interpretation of Utah Code Ann. § 57-1-35, which provides that “The transfer of any debt secured by a trust deed shall operate as a transfer of the security therefor” to argue that none of the defendants had any right in the note, the Deed of Trust or their property and that their loan was a consumer credit transaction subject to Truth-in-Lending Act remedies.

The Circuit Court decision concluded that Senior U.S. District Court Judge David Sam had correctly dismissed the lawsuit in August 2011. Chief Circuit Judge Mary Beck Briscoe and Senior Circuit Judge John C. Porfilio joined in the opinion.

“The Tadeharas’ interpretation of § 57-1-35 was squarely rejected by the Utah Court of Appeals in pdf Commonwealth Property Advocates (144 KB)  … and the reasoning of that case has been endorsed by this court in a case bearing the same caption, pdf Commonwealth Property Advocates, LLC v. Mortgage Electronic Registration Systems, Inc., (268 KB) ” Circuit Judge Murphy wrote on behalf of the panel. Accordingly, the panel held that § 57-1-35 “does not operate to strip the beneficiary of a Deed of Trust or its assigns of the power to foreclose on the secured property on behalf of the original lender or any of its assignees.”

“The Tenth Circuit Court of Appeals has ruled definitively that the plaintiffs’ claims are meritless,” said Janis Smith, MERSCORP’s Vice President for Corporate Communications. “As the panel has demonstrated, MERS has legal authority to act on behalf of the lender, including the right to execute the assignment or foreclose.”

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 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.

Federal Judge Issues Scathing Rebuke of Minnesota Lawyer

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 12, 2012—MERSCORP Holdings, Inc. announced today that United States District Court Judge for the District of Minnesota, Ann D. Montgomery, has severely sanctioned Minnesota-based attorney William B. Butler of the Butler Liberty Law, LLC for continuing to file and litigate frivolous, meritless “show-me-the-note” lawsuits designed to thwart foreclosure proceedings in Minnesota. Judge Montgomery joined three other judges in Minnesota who have sanctioned Butler. She ordered him to personally pay the sum of $75,000, plus an additional undetermined reimbursement of legal costs incurred by counsel for MERS and its co-defendants.

In pdf Blaylock v Wells Fargo Bank, N.A. (73 KB) , Judge Montgomery found that “sanctions are warranted because of Butler’s repeated attempts to assert the rejected ‘show me the note’ theory, as well as his baseless quiet title claims and meritless slander of title arguments.” Judge Montgomery added that the $75,000 sanction was further justified against attorney Butler due to “his cruel arousal of unrealistic hope in his clients, all of whom face foreclosure and for whom this is an extremely emotional issue.”

“Butler’s insistence on re-litigating losing arguments is staggering, and it comes with a cost, because it multiplies the expense of litigation and monopolizes scarce judicial resources,” Judge Montgomery wrote. “Moreover, no one, not even Butler, can reasonably or competently believe in the merits of any of these arguments. Butler’s persistent filing of frivolous arguments is egregious and merits sanctions…”

“Judge Montgomery adds a powerful voice to other judges who are warning attorneys not to take advantage of foreclosed borrowers and give them false hope when they file baseless lawsuits against MERS,” said MERSCORP Holdings Vice President of Corporate Communications, Janis L. Smith. “We hope this steep penalty will finally be a sufficient deterrent to Butler and others choosing to pursue claims like this.”

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 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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