FOR IMMEDIATE RELEASE
For more information, please contact:
Karmela Lejarde, 703-761-1274
Reston, Virginia Feb. 16, 2011—The United States Bankruptcy Court for the District of Kansas on Feb. 10, 2011 found that mortgages naming Mortgage Electronic Registration Systems, Inc are valid and enforceable. The ruling in Martinez v. Mortgage Electronic Registration Systems, Inc. upholds MERS’ role as an agent to hold the Mortgage for its member-lenders.
“The Kansas Bankruptcy Court held that the note and mortgage were never split due to this agency relationship,” said MERS spokeswoman Karmela Lejarde. “The Court found that Countrywide’s interest is secured, and it has the right to enforce the Note and Mortgage through its agent, MERS, or on its own by directing its agent to assign the mortgage to it.”
The Kansas Bankruptcy Court’s ruling sided with the majority of courts who have held that MERS is an agent for its members and found that the mortgage and note were not split. Please click here for a sample of these decisions.
The United States Bankruptcy Court in the Eastern District of New York (IN RE Agard, February 10, 2011) considered the same type of evidence as was before the Martinez court and did grant the motion for relief from stay in favor of U.S. Bank, the moving party in Agard. However, Judge Robert E. Grossman found that “MERS did not have authority as “nominee” or agent, to assign the Mortgage absent a showing that it was given specific written directions by its principal” (emphasis added).
“We disagree with the Court's interpretation because State Courts in New York have already ruled that a written assignment of the note and mortgage by MERS, in its capacity as nominee, confers good title to the assignee,” said Lejarde, citing to U.S. Bank v. Flynn 897 NYS 2d 855 (Suffolk County Supreme Court, 2010).
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