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FOR IMMEDIATE RELEASE

CONTACT: Janis Smith
Phone: 703-738-0230
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Reston, Virginia, June 27, 2014—MERSCORP Holdings, Inc. today announced two recent decisions affirming MERS’ role as mortgagee with the authority to assign a mortgage. The U.S. Court of Appeals for the First Circuit and the Massachusetts Superior Court affirmed dismissals of wrongful foreclosure lawsuits which challenged the validity of MERS as the mortgagee and its subsequent assignment of the mortgage.

In pdf Mills v. U.S. Bank, N.A. (52 KB) , the U.S. Court of Appeals for the First Circuit rejected the appellant’s theory that to avoid violating the Massachusetts statute of frauds, a written recording was required each time the promissory note was sold during the time that MERS served as mortgagee as nominee for the lender and lender’s successors and assigns. The Court found that this theory rests on a “misperception of the MERS framework” and is contrary to Massachusetts precedent holding that the transfer of a promissory note between MERS® System Members did not affect legal title to the mortgage separately held by MERS. The Court similarly rejected the appellant’s claim that MERS was a not a proper mortgagee under Massachusetts law and that as the Court held in pdf Culhane v. Aurora Loan Services (115 KB) , “the MERS System fit comfortably within the structure of Massachusetts mortgage law.”

In pdf Cohen v. The Bank of New York Mellon (483 KB) , the Massachusetts Superior Court concluded that the Bank of New York Mellon, as trustee for the certificate holder CWALT, Inc. Alternative Loan Trust 2006-AO10, had the authority to foreclose as lawful holder of the mortgage that MERS assigned to it. The Court found that MERS had the authority to assign the mortgage, reasoning that the mortgage, signed by the borrowers, expressly named MERS as the mortgagee and therefore “MERS had an explicit contractual right to assign the [m]ortgage.” Moreover, the Court cited the language contained in the 1st Circuit Court of Appeals Culhane decision that “MERS possessed authority ‘twice over’ to assign the mortgage stemming from MERS’s status as equitable trustee and from the terms of the mortgage contract.” The Court rejected all three arguments which the Cohen’s made in an attempt to undermine MERS’ assignment.

“These two opinions build on existing case law in Massachusetts that confirms MERS’ role as mortgagee and its authority to make assignments,” 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 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 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: Janis Smith
Phone: 703-738-0230
Email: This email address is being protected from spambots. You need JavaScript enabled to view it.

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 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.

 MERS assignment is valid

FOR IMMEDIATE RELEASE

CONTACT: Janis Smith
Phone: 703-738-0230
Email: This email address is being protected from spambots. You need JavaScript enabled to view it.

Reston, Virginia, June, 18, 2014—MERSCORP Holdings, Inc. today announced that the Court of Appeals for the Fifth Circuit affirmed the District Court’s holding that borrowers are not third-party beneficiaries of a Pooling and Service Agreement (PSA) and therefore cannot challenge alleged violations of the PSA. Also, the court ruled that the foreclosing party does not have to possess the promissory note when the deed of trust authorizing it to foreclose has been properly assigned.

In  pdf Svoboda v. Bank of America, N.A. (110 KB) , MERS, the original beneficiary of the deed of trust, assigned the deed of trust to BAC Home Loans Servicing, LP (“BAC”) which then assigned the deed of trust to Bank of America, N.A. (“Bank of America”) for the benefit of J.P. Morgan Alternative Loan Trust 2006-S3 (the “Trust”). Bank of America subsequently foreclosed. The borrowers alleged that Bank of America lacked authority to foreclose because the assignments of the deed of trust violated the terms of the Trust’s PSA and because Bank of America did not possess the relevant note when foreclosing.

Relying on its decision in pdf Reinagel v. Deutsche Bank National Trust Co. , the Court of Appeals determined that the Svobodas “cannot challenge the transfer of their deed of trust based on alleged violations of the PSA unless they are third-party beneficiaries.” Moreover, the Court found that even if the Svobodas were third-party beneficiaries a violation of the PSA would not render the assignments void.

The Court also found that because the deed of trust had been properly assigned to Bank of America possession of the note was not required to foreclose. The Court cited a previous ruling – pdf Martins v. BAC Home Servicing, L.P. (102 KB)  (5th Cir. 2013) – to note that MERS qualifies as a mortgagee under Texas law, MERS properly assigned all of its “interest and all rights accrued or to accrue under [the] Deed of Trust” to BAC, and BAC then properly assigned that interest to Bank of America, so that Bank of America became the mortgagee. Therefore, the Court of Appeals affirmed the lower court's ruling that Bank of America had the right to foreclose without possession of the note because Bank of America was properly assigned the deed of trust that authorized it to foreclose.

“MERS as the beneficiary of the deed of trust has the legal authority to act on behalf of the lender—including the right to execute the assignment,” said MERSCORP Holdings Vice President for Corporate Communications, Janis Smith. “Further,” she said “this opinion reaffirms that plaintiffs lack standing to challenge such assignments by MERS.”

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.

 

FOR IMMEDIATE RELEASE

CONTACT: Janis Smith
Phone: 703-738-0230
Email: This email address is being protected from spambots. You need JavaScript enabled to view it.

Reston, Virginia, June 11, 2014—MERSCORP Holdings, Inc. today announced that the Court of Appeals for the Twelfth Appellate District of Ohio affirmed that MERS has the authority to assign a mortgage when it is designated as both a nominee and mortgagee and that a third party lacks standing to challenge the validity of the assignment.

In pdf BAC Home Loans Servicing, L.P. v. Mapp (55 KB) , the borrower appealed an order of the Court of Common Pleas of Butler County denying his motion to set aside a foreclosure judgment, arguing that the assignment from MERS was fraudulent and that Bank of America, assignee of MERS, did not have standing to foreclose.

In his opinion, Judge Stephen W. Powell of the Court of Appeals held that while BAC clearly established that it had the note when it filed the foreclosure complaint, which was enough to establish its right to foreclose, the evidence also proved that it had an interest in the mortgage. Judge Powell said, “Ohio courts, including this court, ‘have consistently held that MERS has authority to assign a mortgage when it is designated as both a nominee and mortgagee.’” … “By signing the mortgage, [the borrower] contractually agreed that MERS possesses the power to transfer rights in the subject property.” The court also noted that the lack of disclosure in the assignment that MERS was acting on behalf of a subsequent note holder did not affect the validity of the assignment.

Further, the court reiterated that under Ohio law a borrower lacks standing to challenge an assignment of a mortgage.

“We are pleased with Judge Powell’s decision confirming, once again, that MERS as a nominee and mortgagee has authority to act on behalf of the lender – including the right to execute the assignment. This authority is granted by plain language in the mortgage document signed at closing by the borrower,” 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 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. 

 

  • About Us

    About Us

    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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  • MERS® eRegistry

    MERS® eRegistry

    The MERS® eRegistry is essential to the eMortgage world. It is the legal system of record for identifying the Controller (holder) and Location (custodian) for the authoritative copy of a registered eNote. Lenders today are closing eNotes and selling them into the secondary market. Both Freddie Mac and Fannie Mae require that Lenders register their eNotes on the MERS® eRegistry.

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  • Information for Homeowners

    Information for Homeowners

    Homeowners today want information about their mortgage loans. Some are facing financial hardship and are struggling with mortgage payments. Information and helpful resources are available. 

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  • Neighborhood Benefits

    Neighborhood Benefits

    Title agents, government agencies and others looking for information about mortgage loans registered on the MERS® System can use Servicer ID or MERS® Link. This public access is often used by local municipalities to identify the servicer responsible for maintaining vacant or abandoned property.

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  • Media Room

    Media Room

    The MERSCORP Holdings, Inc. Media Room provides press contact information and facts about the company and its subsidiary, Mortgage Electronic Registration Systems, Inc. (MERS). These materials are provided to help national, regional and local media better understand the companies' business model and role in the U.S. housing finance system.

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