Panel Affirms Lower Court’s Finding that MERS is a Valid Beneficiary
FOR IMMEDIATE RELEASE
CONTACT: Jason Lobo
Reston, Virginia, July 17, 2012 – MERSCORP Holdings, Inc. today announced that a three-judge panel of the United States Court of Appeals for the Ninth Circuit affirmed the October 25, 2010, dismissal of a plaintiffs’ complaint against Mortgage Electronic Registration Systems, Inc. (MERS) and two other defendants. The Ninth Circuit Court of Appeals includes Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon and Washington.
In Buchna v. Bank of America, the panel affirmed U.S. District Court Judge Mary H. Murguia’s dismissal of the plaintiffs’ complaint. Judges Procter Hug, Jr., Sandra S. Ikuta and Johnnie B. Rawlinson joined in the opinion.
In Buchna, Judge Mary H. Murguia of the U.S. District Court for the District of Arizona granted MERS’ motion to dismiss finding that MERS is a valid beneficiary under Arizona law with the authority to enforce the Deed of Trust. In the lower court decision, Judge Murguia also found no merit to Plaintiffs’ claim that securitization of Plaintiffs’ loan has severed the Note from the Deed of Trust barring any party from initiating foreclosure proceedings. Judge Murguia ruled that these allegations “ignore that the Deed of Trust states that MERS will serve as the nominee for the original lender as well as the original lender’s successors and assigns and has the right to ‘foreclose and sell the property’.” Therefore, MERS is authorized to act on behalf of whichever current entity is the holder of Plaintiffs’ Note.
In affirming Judge Murguia’s order, the Court of Appeals also cited its earlier decision in Cervantes v. Countrywide Home Loans, Inc. and ruled that the Plaintiffs’ arguments “based on their contention that MERS is not a valid beneficiary also fails to state a claim.”
“The Ninth Circuit Court of Appeals, no stranger to these cases, ruled definitively that the plaintiffs’ claims were meritless,” said Janis Smith, MERSCORP’s Vice President for Corporate Communications. “MERS has legal authority to act on behalf of the lender, including the right to execute the assignment or foreclose, and there is a wide body of case law supporting this fact.”
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 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.