FOR IMMEDIATE RELEASE
CONTACT: Jason Lobo
Reston, Virginia, August 16, 2012 – Today’s Washington Supreme Court opinion held that if Mortgage Electronic Registration Systems, Inc. (MERS) is not the promissory note-holder, then it is not considered to be the beneficiary for purposes of non-judicial foreclosures in Washington. The court does not find that deeds of trust that name MERS as beneficiary are invalid and states that there is nothing in this opinion that prevents the parties from proceeding with judicial foreclosures. Nor does it prohibit MERS from acting as mortgagee in the land records or a lenders’ use of the MERS® System to track changes in mortgage servicing and ownership of the promissory note.
As we have maintained consistently, MERS is an agent of lenders and their successors and assigns. In fact, the opinion written by Justice Tom Chambers states: “nothing in this opinion should be construed to suggest an agent cannot represent the holder of a note. Washington law, and the deed of trust act itself, approves of the use of agents.” The opinion also states: “MERS notes, correctly, that we have [the Court has] held ‘an agency relationship results from…consent by one person that another shall act on his behalf…’”
MERS ceased commencing foreclosures in its name over a year ago, so this opinion does not impact its current operations. The opinion will, however, create confusion for Washington homeowners while the trial courts consider its effect on pending cases. We remain confident that MERS’ role in the U.S. housing finance system is valid and will withstand legal challenges.
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.