New York Appellate Court Reverses Decision Involving MERS Mortgage Assignment

Justices Rule Trial Court “improvidently” Dismissed Foreclosure Complaint

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Reston, Virginia, October 24, 2012— MERSCORP Holdings, Inc. today announced that a four-justice panel of an Appellate Division of the New York Supreme Court recently granted Bank of New York’s request for the appointment of a referee to conduct the foreclosure sale of the property, reversing a state trial court’s dismissal of the foreclosure complaint.

In Bank of New York v. Alderazi, Justices Mark C. Dillon, Ariel E. Belen, Leonard B. Austin and Sandra L. Sgrol overturned the lower court’s decision, which ruled that Bank of New York (BONY) lacked standing to foreclose on the borrower’s mortgage because BONY could not prove that Mortgage Electronic Registration Systems, Inc. (MERS) had authority to assign its interest in the borrower’s mortgage to the foreclosing lender, BONY.

The October 17, 2012, opinion written by Justice Dillon held that BONY submitted “the mortgage, the note, the verified complaint setting forth the facts establishing a claim, and evidence of the mortgagor’s [borrower’s] default” to support its standing to foreclose and, therefore, the trial court should have granted the renewed motion for the appointment of a referee to conduct the foreclosure sale.

"The Appellate Court justices were clear in their reversal of the lower court decision," Janis Smith MERSCORP Holdings' vice resident for Corporate Communications said.  "Not only did they note that the lower dismissal was incorrect, but they also  firmly established that all appropriate documentation was valid."

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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 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.