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New Hampshire Supreme Court Acknowledges MERS’ Role Under State Law

High Court Recognizes Agency Relationship Between MERS and Note Holder

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, July 27, 2015—MERSCORP Holdings, Inc. today announced the Supreme Court of New Hampshire ruled in favor of New York Community Bank, finding that as assignee of MERS, it was authorized to foreclose.

In pdf Bergeron v. New York Community Bank (102 KB) , the Plaintiff challenged the defendant’s authority to foreclose, alleging the defendant did not prove that it was the genuine holder of the note and seeking an order to restrain the defendant from foreclosing. The trial court ruled the defendant had the authority to foreclose and the plaintiff appealed.

In its ruling, the Supreme Court of New Hampshire found that an agent of the noteholder may institute foreclosure proceedings under New Hampshire law. “Accordingly, ‘the question becomes whether … the language of the Mortgage alone conclusively establishes an agency relationship between’ the defendant, as assignee of MERS, and any downstream assignee of [the lender] that held the Note at the commencement of foreclosure. Metlife, 286 P.3d. at 1156-57. We believe that it does.” The High Court also noted, “The agreement plainly authorizes MERS to act on the Lender’s behalf, albeit in a limited way, thus evidencing the existence of an agency relationship.”

The Court went on to find that the defendant, as the assignee of MERS and agent of the noteholder, was authorized to initiate foreclosure. “Because the Mortgage evidences an agency relationship between the [original lender] and the mortgagee (MERS), and the Mortgage contemplates that … MERS could assign [its] interest … we conclude that the defendant has the authority, as the agent of the noteholder, to exercise the power of sale.”

“We are pleased that the Supreme Court of New Hampshire recognizes that plain language in the mortgage agreement signed by borrowers at closing establishes the lawful agency relationship between MERS and a lender and its successors,” said MERSCORP Holdings Vice President for Corporate Communications, Janis Smith. “The New Hampshire Supreme Court ruling recognizes MERS authority to take actions on behalf of the lender, including assigning the mortgage.”

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.

United States Court of Appeals Upholds Dismissal of Lawsuit against MERS


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.

MERS has Authority to Assign the Mortgage

Reston, Virginia, July 20, 2015—MERSCORP Holdings, Inc. today announced that the U.S. Court of Appeals for the Sixth Circuit upheld a dismissal by the United States District Court for the Western District of Michigan, finding the plaintiff’s complaint was based on “meritless claims concerning note-splitting and securitization.”

In pdf Margelis v. IndyMac FSB (166 KB) , the plaintiff challenged the assignment of her mortgage by MERS and the subsequent foreclosure, arguing that her promissory note had been separated from her mortgage by securitization, that the separation rendered the mortgage null and void, and that none of the defendants therefore had the authority to assign the mortgage or to foreclose on the property.

In its opinion affirming the district court’s judgment, the Appellate panel held that the borrower’s position on separation of the note and mortgage was erroneous under Michigan law. The Court of Appeals quoted pdf Hargrow v. Wells Fargo Bank N.A. (89 KB) , in holding that “‘it is lawful for the holder of the mortgage to be different from the holder of the debt’ and there is no bar to the subsequent transfer of the mortgage without a corresponding transfer of the underlying debt.’’ 491 F. App’x 534, 538 (6th Cir. 2012).

“We are pleased that the U.S. Court of Appeals affirmed the district court ruling and held that the mortgage and the debt need not be held by the same party under Michigan law, and the rights to assign and foreclose are not affected by such an arrangement,” said MERSCORP Holdings Vice President for Corporate Communications, Janis Smith. “This decision is consistent with the Michigan Supreme Court’s 2011 ruling in pdf Residential Funding Co., L.L.C. v. Saurman (40 KB) , and we believe the case law on this point should be considered settled once and for all.”

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.

MERS Wins Complete Dismissal of Texas Counties’ Recording Fee Suit

Dallas, Brazoria and Harris Counties Lose Appeal in Fifth Circuit

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, July 6, 2015—MERSCORP Holdings, Inc. today announced that the United States Court of Appeals for the Fifth Circuit recently affirmed a ruling from the U.S. District Court for the Northern District of Texas in favor of Mortgage Electronic Registration Systems, Inc. (MERS) and its co-defendant, dismissing all of the claims filed by Dallas, Brazoria and Harris Counties, Texas.

In  pdf Dallas County, Texas, et al. v MERSCORP, Inc., et al. (446 KB) , the counties alleged that Defendants failed to record deed of trust assignments in violation of Texas statutes and also claimed fraudulent misrepresentation and unjust enrichment.

The Counties argued that MERS must record assignments every time the promissory note is transferred or negotiated and that naming MERS as the beneficiary on a security instrument was a false representation. The Court, when examining whether such duty exists, held that there is no duty to record under Texas Local Government Code Section 192.700 and that statute is not “an affirmative mandate to the public that deed-of-trust beneficiaries must record assignments of either the deed of trust or the related promissory note.”

The Court recognizes because there is no duty to record either assignments of the deed of trust or the related promissory note, the county has not suffered any injury because “Dallas County was not entitled to a fee in the first place, it could not have suffered a financial injury.”

Further, the court reasoned that designating MERS as the “beneficiary” of the deeds of trust was not a false representation. The Court stated that “As a matter of basic contract law, MERS is a beneficiary.” The Court continued, “Thus, in Texas, it is not inconsistent for the deed of trust to label MERS both as a ‘nominee’ and as a ‘beneficiary.’” The ruling finds that there are no false representations made by presenting deeds of trust that designate MERS as the beneficiary.

“We’re pleased the Fifth Circuit recognized in its unanimous, well-reasoned opinion that MERS has been in full compliance with the law, that the statement ‘MERS is a beneficiary’ is not a false representation and as a matter of contract law, is true, and that the Counties have not suffered a financial injury because of MERS,” said MERSCORP Holdings Vice President for Corporate Communications, Janis Smith.

This decision joins the dismissals of similar lawsuits brought by county recorders throughout the country in MinnesotaNorth Carolina, Rhode Island, Michigan, Oklahoma, Iowa, Florida, Arkansas, Illinois, Missouri, Massachusetts, West Virginia and Kentucky.

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.

Federal Court of Appeals Rules Kentucky Law does not Require the Recording of Transfers of Promissory Notes

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, July 17, 2015—MERSCORP Holdings, Inc. today announced that the United States Sixth Circuit Court of Appeals issued a ruling that the Kentucky recording statutes do not require a recording in the land records when promissory notes are transferred.

In pdf Higgins v BAC Home Loans Servicing, (100 KB) the plaintiffs alleged that transfer of notes was an assignment of the underlying mortgages that for the purposes of Kentucky’s recording statutes requires note assignments to be recorded. The Court points out that the Kentucky legislature distinguishes between mortgage assignments which must be recorded and note assignments for which recording is optional. While it is true that by operation of Kentucky law, an equitable interest in the mortgage is acquired when a note is transferred, the Court recognizes that “The text, structure, and purposes of Kentucky’s recording statutes compel the conclusion that recording is not required when a party acquires merely an interest in the mortgage, without acquiring the actual mortgage deed.”

In his opinion, Circuit Judge John M. Rogers concluded, “Because it is undisputed that defendants transferred only promissory notes and did not fail to record any transfers of mortgage deeds, defendants did not violate KRS 382.360(3) and the district court should have dismissed plaintiffs’ action on that basis.”

“We’re pleased that the United States Sixth Circuit Court of Appeals recognized that Kentucky’s recording laws are consistent with MERS’ practices,” said MERSCORP Holdings Vice President for Corporate Communications, Janis Smith. “The Court confirmed that the Kentucky recording statutes do not require that promissory notes be recorded.”

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.

Georgia Federal and State Courts Rule in MERS’ Favor

FOR IMMEDIATE RELEASE

CONTACT: Sandra Troutman
Phone: 703 761-1274
Email: This email address is being protected from spambots. You need JavaScript enabled to view it.

Reston, Virginia, June 24, 2015—MERSCORP Holdings, Inc. today announced that the United States District Court for the Northern District of Georgia dismissed Dean v. Mortgage Elec. Registration Sys., while the Superior Court of Fulton County granted MERS’ Motion for Summary Judgment in Johnson v. Mortgage Elec. Registration Sys., Inc.

First, in pdf Dean v. Mortgage Elec. Registration Sys. (80 KB) , the plaintiffs filed a quiet title suit against MERS and other defendants. But, as the Court points out, the plaintiffs admit that they executed a security deed in favor of MERS, who held record title and later assigned its interest, so the Plaintiff cannot bring a quiet title claim because they do not hold record title. In his decision, Judge Mark H. Cohen of the United States District Court for the Atlanta Division of the Northern District of Georgia, found that MERS and its assignee had a valid interest in the security deed and determined that, “ … on the basis of the facts alleged, Plaintiffs’ Complaint is frivolous and fails to state a claim on which relief can be granted.”

Also, in pdf Johnson v. Mortgage Elec. Registration Sys. Inc. (3.44 MB) , the plaintiff alleged the MERS Security Deed was unenforceable and MERS Assignment to GMAC was invalid because they contained an erroneous legal description of the property. In his opinion, Judge John J. Goger with the Fulton County Superior Court held, “… the Security Deed Plaintiff executed in favor of MERS and that was subsequently transferred to GMAC is valid and binding …” The court reasoned that the error in the legal description had no effect on the validity of security deed because it was merely a typographical error, and MERS and its assignee therefore had authority under the security deed to enforce its terms.

Both decisions cited a 2013 Georgia Court of Appeals decision, pdf Montgomery v. Bank of America (72 KB) , which affirmed that MERS, as the grantee named in the security deed, has an interest in and the authority to assign the security deed.

“We are pleased to see the validity of MERS’ role as grantee under the security deed is becoming well established in Georgia law and that claims to the contrary are being rejected as frivolous,” said MERSCORP Holdings Director, Corporate Communications, Sandra Troutman. “Courts in Georgia and across the country are consistently holding that MERS has a valid interest in security instruments and the authority to assign that interest.”

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.

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Click here to proceed.

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