Texas Court of Appeals Says MERS is Recognized Beneficiary under Texas Law

Chief Justice Also Affirms that when MERS is Mortgagee of Record, Re-Recording is not
required if the Note is Transferred between MERS Members


CONTACT: Jason Lobo
Phone: 703-652-1660

Reston, Virginia, May 22, 2012—MERSCORP Holdings, Inc. today announced that the Chief Justice of the Texas Court of Appeals, Third District, at Austin, affirmed a state trial court decision, which granted defendants’ motion to dismiss a borrowers’ claim of wrongful foreclosure against MERS and a member-lender.

Chief Justice J. Woodfin Jones issued the May 18th opinion on behalf of his fellow justices in Campbell v. MERS et al, finding that the MERS assignment of the Deed of Trust was valid. “Under Texas law, where, as here, a deed of trust expressly grants MERS the power of sale, then MERS has that power,” he wrote. “MERS had the authority to transfer the rights and interests in the deed of trust to Wells Fargo. When MERS transferred the deed of trust to Wells Fargo, Wells Fargo obtained all MERS’s rights and interests in the deed of trust, including the power to foreclose on the property.”

The Court also found no merit to the plaintiffs’ claims of “bifurcation” of the promissory note and deed of trust. “When, as here, the deed of trust names MERS as the nominee for the lender and its successors and assigns and the deed of trust is recorded in the local real-property records with MERS as the named beneficiary, MERS remains the mortgagee of record if the note is transferred between MERS members, and there is no requirement that the deed of trust be re-recorded each time it is transferred,” Chief Justice Jones wrote.

“As the Chief Justice of the Texas Court of Appeals makes clear, MERS’ position as trust deed beneficiary is recognized under Texas law and its role in the foreclosure process is appropriate,” said Janis L. Smith, MERSCORP Holdings Vice President of Corporate Communications.

For descriptions of cases and other materials pertaining to MERS’ role and business model 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 about 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 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.