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MERS Prevails in Pennsylvania County Recording Litigation

Court of Appeals for the Third Circuit Rules No Duty to Record Land Conveyances 

FOR IMMEDIATE RELEASE

CONTACT: Janis Smith
Phone: 703-738-0230
Email: This email address is being protected from spambots. You need JavaScript enabled to view it.

Reston, Virginia, August 3, 2015—MERSCORP Holdings, Inc. today announced that the United States Court of Appeals for the Third Circuit reversed the opinion of the United States District Court for the Eastern District of Pennsylvania, ruling in MERS’ favor that the Pennsylvania recording statute does not create a duty to record all land conveyances.

In pdf Montgomery County v. MERS (355 KB) , the county recorder, claimed that MERS® System members failed to record the transfer of promissory notes as mortgage assignments in violation of Pennsylvania recording laws. She sought to recover millions of dollars in unpaid recording fees.

In its ruling, the Court of Appeals for the Third Circuit held, “Because we conclude that Pennsylvania’s §351 imposes no duty to record all land conveyances, we will reverse the July 1, 2014 order of the District Court which granted the Recorder’s request for a declaratory judgment and denied the MERS entities’ motion for summary judgment.” The Court noted that its decision was in accord with the opinions of other courts that have rejected similar claims. (See pdf Fifth Circuit (446 KB) , pdf Seventh Circuit (162 KB) and pdf Eighth (194 KB)   pdf Circuit (132 KB) .)

The Court also denied Montgomery County’s request to certify questions to the Supreme Court of Pennsylvania noting that “the answer to the issue of state law that decides this case … is so clear that we would be abdicating our responsibilities by punting.”

“This is a significant ruling for the mortgage finance industry in the Commonwealth of Pennsylvania. MERS has always maintained that no Pennsylvania law, including the recording statute imposes a duty to record the transfer of a promissory note,” said MERSCORP Holdings Vice President for Corporate Communications, Janis Smith. “We are pleased the Court of Appeals for the Third Circuit finds the county recorder’s arguments to have ‘no merit.’”

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.

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