Montana Supreme Court Affirms Ruling in MERS’ Favor

Deed of Trust with MERS as Nominee and Assignment by MERS Established a Valid, Secured Interest


CONTACT: Janis Smith
Phone: 703-738-0230
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Reston, Virginia, October 27, 2015—MERSCORP Holdings, Inc. today announced that the Supreme Court of Montana, in a majority opinion last week, held that “a recorded deed of trust and chain of assignments, including assignments by MERS, can establish a secured interest in real property.” The Supreme Court in pdf Goodwin v. MERS, MERSCORP, et. al (123 KB) affirmed a ruling of the Eleventh Judicial District Court in Flathead County, noting that “the District Court’s interpretation and application of the law were correct.”

The District Court ruled earlier this year in favor of Mortgage Electronic Registration Systems, Inc. (MERS), MERSCORP Holdings, Inc., and others, in a quiet title action filed by the plaintiff after he defaulted on his mortgage payments and received notice of a trustee’s sale. In his complaint, the plaintiff alleged violations of various state and federal mortgage laws regarding notice and assignment of mortgages. MERS was the named beneficiary as nominee for the lender and the lender’s successors and assigns on the plaintiff’s deed of trust. The District Court granted the Defendants’ (MERS and others) motion for summary judgment, holding that the plaintiff (Goodwin) had presented no admissible evidence demonstrating genuine issues of material fact as to the Defendants’ interest in the Property.

“We are pleased that the Montana Supreme Court agrees that a deed of trust naming MERS – and any subsequent assignments by MERS – can establish a secured interest in real property. In the opinion of the Court, the law on this point is settled,” said MERSCORP Holdings Vice President for Corporate Communications, Janis Smith. “MERS has the legal authority to act on behalf of the lender, including authority to assign, and this authority is granted by plain language in the mortgage document signed at closing by the borrower.”

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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.