District Court Finds State Has No Statutory Requirement to Record

Jason Lobo
Phone: 703.652.1660
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Reston, Virginia, July 8, 2013— MERSCORP Holdings, Inc. today announced that Judge John J. McConnell, Jr., of the U.S. District Court for the District of Rhode Island recently ruled in favor of MERSCORP Holdings, Inc., Mortgage Electronic Registration Systems, Inc. (MERS) and other member-bank defendants in a Rhode Island recording fee suit.

In pdf Town of Johnson v. MERSCORP Holdings, Inc., et al. , Judge McConnell dismissed a class action suit filed by the Town of Johnston on its own behalf and on behalf of all other similarly situated Rhode Island cities and towns. Allegations included violations of Rhode Island’s recording requirements and unjust enrichment. Both counts were dismissed.

“Rhode Island law does not require that all mortgages and mortgage assignments be recorded,” Judge McConnell wrote. “Absent a statutory requirement to record, there are no damages, and, therefore there is no cause of action.”

Citing a previously established Rhode Island Supreme Court opinion in pdf Bucci v. Lehman Bros. Bank, FSB (54 KB) , Judge McConnell held that “[w]henever a note is sold, assigned, or otherwise transferred to another MERSCORP member, MERS remains the mortgagee of record. As a result, there is no need to record an assignment of the mortgage in the land evidence records. It is only when a loan is transferred to a nonmember that an assignment of the mortgage must be executed and recorded.”

“Rhode Island courts have consistently upheld MERS valid role and authority,” MERSCORP Holdings’ Director of Corporate Communications Jason Lobo said. “This ruling mirrors similarly dismissed recorder fee lawsuits brought by counties in North Carolina, Iowa, Florida, Arkansas, Illinois, Missouri and Kentucky,”

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.