MERS Wins Dismissal of Minnesota Counties Recording Case


Janis Smith
Phone: 703-738-0230
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Reston, Virginia, August 27, 2013— MERSCORP Holdings, Inc. announced that the United States District Court for the District of Minnesota yesterday dismissed a lawsuit filed earlier this year by Ramsey and Hennepin Counties on behalf of themselves and all other Minnesota counties (the Counties), ruling in favor of MERSCORP Holdings, Inc., Mortgage Electronic Registration Systems, Inc. (MERS) and numerous other MERS® System members.

In pdf The County of Ramsey and the County of Hennepin vs. MERSCORP Holdings, Inc., et al (109 KB) , the Counties alleged Minnesota statutes create a mandatory recording obligation that every conveyance must be recorded. Rejecting the Counties claim, Judge David S. Doty wrote, “In sum, based on an analysis of its plain language, canons of construction and treatment by other courts in Minnesota, the court concluded that §507.34 does not create a mandatory recording obligation.”

“The Minnesota Court has made it clear that there is no statutory duty to record all conveyances, but rather, the statute outlines where to record and explains the consequences of failing to record,” noted MERSCORP Holdings Vice President for Corporate Communications, Janis Smith. “MERS perfects its lien priority and protects the MERS System member by recording all MERS mortgages in the appropriate county land records.” Once MERS is the mortgagee of record, no assignments or subsequent recording is required when transfers take place between MERS® System members, but such transactions are tracked on the MERS® System.

“Yesterday’s opinion also includes a reminder that MERS’ role and authority in Minnesota has already been decided by the state’s highest court,” added Smith. In a footnote, Judge Doty’s opinion stated, “The court also noted that the MERS Registry is implicitly approved by Jackson,” a 2009 decision from the State of Minnesota Supreme Court.

This decision joins the dismissals of similar lawsuits brought by county recorders in North Carolina, Rhode Island, Michigan, Oklahoma, Iowa, Florida, Arkansas, Illinois, Missouri and Kentucky.

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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.