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Judge states trust deed clearly authorizes MERS to act as true beneficiary

FOR IMMEDIATE RELEASE

CONTACTS:
Janis L. Smith
Phone: 703-738-0230
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Karmela Lejarde
Phone: 703-761-1274
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Reston, Virginia, January 10, 2012—The U.S. District Court for the District of Oregon, in pdf Crowden v. Fannie Mae (1.12 MB) , late last month dismissed the borrower’s wrongful foreclosure action and upheld the validity of the deed of trust assignment from Mortgage Electronic Registration Systems, Inc. (MERS) to SunTrust.

“The trust deed here clearly authorizes MERS to act as the true beneficiary and proclaims MERS is the beneficiary under the trust deed,” wrote U.S. District Judge Marco Hernandez in his Dec. 22nd decision. “The trust deed also explicitly gives MERS, as the beneficiary under the trust deed, the right to foreclose on the Property. Clearly, this is not where the trust deed limits MERS’s role only to the capacity as a nominee for the lender.”

Judge Hernandez rejected the plaintiff’s challenge to the status of MERS as beneficiary under Oregon law and wrote, “[p]laintiff’s bald assertion that SunTrust was only the servicer of the loan belies the record, which clearly shows SunTrust was assigned all of MERS’s beneficial interest under the trust deed.”

In a separate lower court ruling, Judge Daniel Harris of the Oregon Circuit Court for Jackson County dismissed Fannie Mae’s eviction action against the defendant in pdf Fannie Mae v. Goodrich (323 KB) , agreeing with the defendant’s assertion that the foreclosure was invalid because MERS is not the beneficiary of the defendant’s trust deed, and that there are assignments of the trust deed that were unrecorded before the non-judicial foreclosure commenced. Fannie Mae is appealing this Dec. 7th decision to the Oregon Court of Appeals.

“The Crowden decision shows that at the federal level, judges are consistent in their understanding of the MERS business model,” said Janis L. Smith. “Judge Hernandez agrees that the trust deed clearly authorizes MERS to act as the beneficiary, and therefore, there was nothing improper about the foreclosure in question. However, it is also clear from the Goodrich decision that there are still a few conflicting interpretations from lower courts around the country, which we anticipate will be clarified at the appellate level.”

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Judges agree with lower court’s ruling that MERS can act as agent for new owners

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, Virginia, January 4, 2012—In a unanimous decision, the U.S. Court of Appeals For the First Circuit in Massachusetts ruled Dec. 13 in favor of defendant Aurora Loan Services in pdf Kiah v. Aurora Loan Services, MERS, et al (100 KB) , and upheld the lower court’s decision that Mortgage Electronic Registration Systems, Inc (MERS) could assign the mortgage without possessing a beneficial interest in, or holding, the promissory note.

The Appeals Court’s decision affirmed the March 4, 2011 Memorandum and Order of the U.S. District Court for the District of Massachusetts, which stated that MERS could assign the mortgage because “legally MERS was holding the mortgage in trust for Aurora.”

“[P]laintiff’s claims [were] contradicted by the very documents that he submitted with the complaint,” wrote U.S. District Court Judge F. Dennis Saylor. “[T]he commonplace phrase ‘successors and assigns’ … [made] clear that the note and mortgage may be assigned and that MERS may continue to act as an agent for the new owners.”

“The Appeals Court’s ruling cannot be clearer,” said Janis L. Smith, MERSCORP’s Vice President of Corporate Communications. “The mortgage, which the borrower signed at closing, gives MERS the authority to represent current and future owners of the loan, and this authority includes the ability to assign the mortgage.”

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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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