Recent Rhode Island Decisions Repeatedly Uphold MERS’ Role

Superior Court rejects challenge after challenge to MERS’ authority to hold, assign, or foreclose


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Reston, Virginia, July 5, 2012–Rhode Island Superior Court Justice Allen P. Rubine issued eight decisions from April to June that dismissed wrongful foreclosure and other claims against Mortgage Electronic Registrations Systems, Inc. (MERS) and other defendants. 

In each of the eight rulings below, Justice Rubine repeatedly rejected the plaintiffs’ various allegations, including MERS’ supposed lack of authority to foreclose mortgages in its name, and its inability to assign those mortgages. Citing previous decisions in Kriegel v. MERS, Breggia v. MERS, and Payette v. MERS, Justice Rubine ruled instead that MERS is a valid mortgagee under Rhode Island law with the authority to act on behalf of the current note owners, including assigning and/or foreclosing the mortgages MERS holds as mortgagee on the properties. 

  • In Cuevas v. The Bank of New York Mellon, (R.I. Super. April 18, 2012), Justice Rubine, based on the decisions in the Bucci, Payette, Kriegel and Rutter cases, held that “it is clear beyond a reasonable doubt that the original lender’s designation of MERS as mortgagee in the mortgage instrument was binding on plaintiff, as plaintiff acknowledged and agreed by his signature thereon [the mortgage] to the terms contained herein.”
  • In Falconer v. MERS, (R.I. Super. May 1, 2012), Justice Rubine wrote, “MERS, while not the lender or note-holder, may nonetheless invoke the statutory power of sale as the mortgagee and nominee for the lender…”
  • In Ingram v. MERS. (R.I. Super. May 17, 2012), Justice Rubine specifically noted that “MERS, as well as the successors and assignees of MERS, were expressly granted the ‘right to exercise any or all interests, including…the right to foreclose and sell the Property,’ as set forth by the clear unambiguous language of the Mortgage instrument …”
  • In O'Brien v. MERS, (R.I. Super. June 4, 2012), Justice Rubine found that “the Mortgage instrument expressly permitted assignment of the Mortgage interest by MERS and authority was specifically approved by the mortgagor … [a]ccordingly, MERS had the authority to assign the Mortgage interest to Deutsche Bank …”
  • In Kosiba v. MERS, (R.I. Super. June 25, 2012), Justice Rubine declared that, “As a result of the assignment, Bank of New York succeeded to all the rights granted to MERS through Plaintiff’s execution of the Mortgage instrument…”
  • In Chunn v. MERS, (R.I. Super. June 26, 2012), Justice Rubine ruled that, “… Aurora was the party authorized to exercise the statutory power of sale by way of assignment of the Mortgage interest by MERS.”
  • And in both Cafua v. MERS, (R.I. Super. June 20, 2012) and Scarcello v. MERS (R.I. Super. June 26, 2012), Justice Rubine rejected the plaintiffs’ standing to sue. In Cafua, Justice Rubine stated that “the Court cannot hear facts or legal argument from Plaintiffs to prove an alleged defect in an assignment since Plaintiffs lack standing, as strangers to the assignment;” and in Scarcello, he found that the plaintiffs “do not have standing to challenge the validity of the assignment or transfer of the Mortgage interest, to which [they] are a stranger.”

“Rhode Island case law has been consistent when it comes to MERS’ role as mortgagee,” said Janis Smith, MERSCORP’s Vice President for Corporate Communications. “As Justice Rubine has demonstrated, challenges to MERS’ authority to act on behalf of the lender—including the company’s right to execute the assignment or foreclose—will only be met with rejection.”

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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 approximately 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(s) 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.