CONTACT: Janis Smith
Phone: 703-738-0230
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Reston, Virginia, June 20, 2014—MERSCORP Holdings, Inc. today announced that the Court of Appeal of the State of California Second Appellate District affirmed the dismissal of the plaintiff’s complaint, holding that California does not permit a preemptive challenge to the authority of a foreclosing party. Additionally, it ruled that a borrower lacks standing to challenge an assignment.

In pdf Keshtgar v. U.S. Bank (28 KB) , the borrower alleged that an assignment from MERS to U.S. Bank was invalid for several reasons including that the MERS signing officer was not an agent, employee, or officer of MERS or the original lender.

In the opinion, Judge P.J. Gilbert reiterated the holding in pdf Gomes v. Countrywide Home Loans  decided by the 4th Appellate District Court of California in 2011 “that the California statutory scheme allows no preemptive action to challenge the authority of the person initiating foreclosure. No allegation of fact, no matter how specific, is sufficient to overcome the absence of a cause of action.” The court reasoned that this standard precluded such an action regardless of whether the challenge was to MERS as a lender’s nominee, as it was in Gomes, or its assignee.

Further, Judge Gilbert further stated, “California cases hold … that … a borrower lacks standing to challenge an assignment absent a showing of prejudice.”

“This holding confirms that California Courts are dismissing lawsuits that contain unfounded allegations that an assignment from MERS is invalid,” said MERSCORP Holdings Vice President for Corporate Communications, Janis Smith.

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


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.