Ninth Circuit Court of Appeals Affirms MERS' Authority

Panel Holds None of Plaintiffs’ Arguments to be Persuasive

FOR IMMEDIATE RELEASE 
CONTACT:  Jason Lobo
Phone: 703-652-1660
Email: This email address is being protected from spambots. You need JavaScript enabled to view it.

Reston, Virginia, February 22, 2013—MERSCORP Holdings, Inc. today announced that a three-judge panel of the U.S. Court of Appeals for the Ninth Circuit affirmed, without hearing, an order from the U.S. District Court for the District of Hawaii dismissing with prejudice plaintiffs’ complaint against MERS.  The ruling found that MERS as nominee for the lender and the lender’s successors and assigns had authority to act, including assigning the mortgage to a third party.

The appellate ruling, ordered by Circuit Court Judges Jay S. Bybee, Morgan Christen and Susan Graber, affirmed the thorough and detailed decision by District Judge David Alan Ezra. 

The plaintiffs’ second amended complaint contained four allegations related to MERS’ assignment of the mortgage to a foreclosing lender. Not only did Judge Ezra find that the plaintiffs, “as strangers to the Assignment,” lacked standing and “may not dispute the validity of the Assignment,” but he also fully addressed the merits of their claims.

“[T]he Court has grave doubts about the validity of the factual predicate underlying most, if not all, of Plaintiffs’ claims,” Judge Ezra wrote. Citing a previous Ninth Circuit case (Cervantes v. Countrywide Home Loans, Inc.) containing “identical language to the mortgage at issue,” Judge Ezra held that “the Ninth Circuit concluded that MERS was a legitimate organization and that the mortgage which plaintiffs signed put them on notice of the role MERS was to play in their home loans.”

“Judge Ezra could have simply dismissed these allegations when noting that the plaintiffs were not a party to the Assignment and, therefore, could not challenge its validity, but he further analyzed the merits – or lack thereof – of the complaint,” MERSCORP Holdings’ Director for Corporate Communications Jason Lobo said.  “We are pleased that Judge Ezra found no merit to these charges and that the appellate panel agreed with his methodical rejection of these frequently used and always failing legal arguments.”

For descriptions of cases and other materials pertaining to MERS’ business model and role in U.S. housing, please visit www.mersinc.org

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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.