Florida Court Ruling Affirms MERS’ Role as Mortgagee

Judge Rules Florida Law Uniformly Opposed to Plaintiffs’ Claim


CONTACT:  Jason Lobo
Phone: 703-652-1660
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Reston, Virginia, February 26, 2013— MERSCORP Holdings, Inc. today announced that Judge John C. Cooper of the State of Florida Circuit Court of the Second Judicial Circuit held “[n]umerous courts have examined, and approved, the use of MERS as a mortgagee” and rejected a private citizen claim alleging violations of Florida False Claims Act (FCA). 

In State of Florida and the State of Florida through its Department of Revenue ex. rel. Barbara Stevens and Thomas Stevens v. MERS, et al., Plaintiffs alleged MERS and its members made false statements when designating MERS as mortgagee on mortgages to avoid documentary stamp taxes.

“…Florida law is uniformly opposed to Plaintiffs’ claim that designating MERS as a mortgagee is a false statement,” Judge Cooper held. “Courts in Florida have heard, and rejected, numerous similar challenges to the designation of MERS as mortgagee.”

As a matter of state law, Judge Cooper noted that Plaintiffs cannot seek compensation through FCA because “Florida law vests exclusive authority for the ‘control and administration’ of many tax laws, including the Stamp Tax at issue here, in the Florida Department of Revenue,” not the court system. The “Stamp Tax” is a single excise tax levied on either a promissory note or mortgage (but not both) evidencing a borrower’s promise to pay. 

He further held that even if Plaintiffs’ could bring their claim under FCA, it would fail because as a prerequisite to FCA claims, Plaintiffs must be an “original source” of the charges made in any suit. Similar charges against MERS, however, have already been disclosed in the public domain for many years and are, as a result, barred under the FCA statute. Judge Cooper further described that even if the Plaintiff could bring an FCA claim and was considered an original source, the court would nevertheless dismiss the case because the Plaintiff still failed to state a claim under FCA because designating MERS as a mortgage is not a false statement as a matter of law.

“The Stamp Tax argument appears to be merely another futile attempt to link MERS to supposed unpaid recording fees in Florida,” MERSCORP Holdings’ Director for Corporate Communications Jason Lobo said. “That argument was dismissed last year in the case of Jim Fuller, Clerk of the Circuit Court of Duval County v. MERS, Inc. and MERSCORP, Inc.

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.