Court agrees mortgage and note are not split when MERS is an agent of the note holder
FOR IMMEDIATE RELEASE
CONTACT: Jason Lobo
Reston, Virginia June 13, 2012— MERSCORP Holdings, Inc. today announced that a decision written by Kansas Court of Appeals Judge Tom Malone sustained a lower court ruling in favor of U.S. Bank and rejected an appeal of wrongful foreclosure.
Judge Malone’s opinion in U.S. Bank v. Howie rejected the borrower’s notion that MERS split the mortgage and the note and therefore the foreclosure was invalid. “We conclude that the plain language of the Mortgage herein provided sufficient and undisputed evidence that MERS was acting as an agent of U.S. Bank at all relevant times,” Judge Malone wrote on behalf of the three-judge panel. “Because MERS was acting as an agent of U.S. Bank, the Mortgage and the Note were never severed and U.S. Bank, as present holder of both the Note and the Mortgage, was entitled to foreclose on the Mortgage.”
The Court of Appeals noted that a decision from the Kansas Supreme Court that the borrower relied upon, Landmark v. Kesler, did not address whether the mortgage and note were split, but was limited to matters surrounding Kansas civil procedure.
“This Kansas Court of Appeals ruling mirrors five other rulings from the United States Bankruptcy Court for the District of Kansas, all of which said that the note and mortgage were never split because MERS is an agent of the note holder,” said MERSCORP Holdings Vice President of Corporate Communications, Janis L. Smith. “This failed and meritless theory has been solidly rejected in Kansas. Furthermore, the Court of Appeal’s distinguishing of Landmark supports what we have long argued, that Landmark does not support the argument that MERS mortgages are unenforceable.”
For descriptions of cases and other materials pertaining to MERS’ role and business model 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 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 on behalf of its members.