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Iowa Counties Lose Appeal in Recording Fee Case

Upholds District Court’s Decision that Counties’ “Unjust Enrichment” Claim Lacks Merit

FOR IMMEDIATE RELEASE

CONTACT: Janis Smith
Phone: 703-738-0230
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Reston, Virginia, December 23, 2014—MERSCORP Holdings, Inc. today announced that the U.S. Court of Appeals for the Eighth Circuit issued a favorable ruling in an Iowa recording fee case.

In pdf Plymouth County, Iowa by and through Darin J. Raymond, Plymouth County Attorney v. MERSCORP, Inc, MERS, et al. (194 KB) , the County, on behalf of other Iowa Counties, allege that Lenders failed to record mortgage assignments resulting in MERS being unjustly enriched by not paying recording fees for mortgage assignments not recorded. The U.S. District Court had granted a motion to dismiss with prejudice holding that there can be no unjust enrichment if there is no obligation to record the mortgage or mortgage assignment.

The County had argued that while Iowa law imposes no duty to record, MERS was nonetheless unjustly enriched because it enjoys the protection afforded by recording mortgage assignments at the expense of the County. The Eighth Circuit, citing to its recent decision in Brown, iterated that, “when state law imposes no duty to record a mortgage or subsequent assignment, a county cannot successfully state a claim for unjust enrichment.” See  pdf Brown v. Mortg. Elec. Registration Sys., Inc. (132 KB) , 738 F.3d 926, 934-35 (8th Cir. 2013). The 8th Circuit concluded that with no legal obligation to record, lenders could not possibly have withheld recording fees that should have been paid to the County.

“We believed that there was no merit to the claims made in the complaint,” said MERSCORP Holdings Vice President for Corporate Communications, Janis Smith. “We are pleased with the Court’s decision.”

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.

Eighth Circuit Court of Appeals Affirms Dismissal of Minnesota Counties’ Lawsuit

Upholds District Court’s Ruling No Mandatory Recording Requirement Under Minnesota Law

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, December 22, 2014—MERSCORP Holdings, Inc. today announced that the U.S. Court of Appeals for the Eighth Circuit affirmed the ruling by the District Court of Minnesota that there is no mandatory recording requirement under Minnesota law and the dismissal of the Complaint. The Eighth Circuit also declined to certify a question to the Minnesota Supreme Court as requested by the Counties because the Minnesota courts have interpreted the Act in numerous instances, and the issue before the Court only requires a straightforward application of this case law.

In pdf The County of Ramsey and the County of Hennepin, v. MERCORP Holdings, Inc., Mortgage Electronic Registration Systems., et al. (75 KB) , the two counties, on behalf of eighty-seven Minnesota counties, filed a class-action suit alleging that the Lenders’ use of MERS and the MERS® System deprived the Counties of recording fees for mortgage assignments by allowing parties to bypass recordation with the Counties causing the loss of statutory recording fees and creating gaps in chains of title.

The Circuit Court held that, “ … because we believe Minnesota case law establishes that Minnesota law imposes no duty to record a mortgage or a mortgage assignment with the county recorder, the district court did not err in its determination that there was no mandatory recording requirement under Minnesota law … .” The Circuit Court cited to a number of Minnesota Court cases interpreting the Recording Act that find that recording is permissive. See e.g.,  pdf Jackson v. MERS (52 KB) . The Court noted that the district court held that the wording “shall be recorded” in the Recording Act does not require recordation of land transfers, but instead informs parties where they should record their instrument if they desire the benefits of recording the security instrument, namely providing notice of the lien and its priority.

Further, the Eighth Circuit held that a county did not and cannot state a claim for unjust enrichment or public nuisance “when there is no duty under state law to record mortgages or subsequent assignments.”

“We did not believe the claims behind this case had merit,” said MERSCORP Holdings Vice President for Corporate Communications, Janis Smith. “The appellate court’s ruling, once again, confirms the legality of MERS and its business.”

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.

Supreme Court of Delaware Upholds Validity of MERS’ Assignee

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, October 9, 2014—MERSCORP Holdings, Inc. today announced that the Delaware Supreme Court issued an order affirming a foreclosure judgment for BAC Home Loan Servicing, LP and in doing so finds that the assignment of mortgage executed by MERS complies with Delaware law.

In pdf Albertson v. BAC Home Loan Servicing, LP (72 KB) , the plaintiff borrowers alleged that the assignment of their mortgage from MERS to BAC was invalid.

In the Supreme Court’s order, Justice Henry DuPont Ridgely held that the Court would “assume without deciding that the Albertsons had standing to challenge the assignment at issue” because regardless of standing, the Albertsons’ claims regarding the assignment “lacked merit.” The assignment by MERS complied with the requirements of Delaware law to have one creditable witness and was notarized. The Court found that the record indicates that “MERS was properly designated as the assignor of the mortgage, and [] BAC assumed the authority to enforce the mortgage upon the execution of the assignment.”

“We are pleased that the Supreme Court of Delaware has affirmed the lower court’s findings and upheld the validity of the MERS assignment,” said MERSCORP Holdings Vice President for Corporate Communications, Janis Smith.

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' Authority to Assign Mortgage Upheld by Rhode Island Supreme Court

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, December 16, 2014—MERSCORP Holdings, Inc. today announced that the Rhode Island Supreme Court ruled, consistent with prior cases, that language in the mortgage explicitly grants the power of sale to MERS and its successors and assigns.

In pdf Breggia v. Mortgage Elec. Reg. Sys., Inc. (41 KB) , the plaintiffs claimed MERS’ assignment was invalid because MERS lacked authority to assign the mortgage. The trial court granted summary judgment in favor of MERS and the plaintiffs filed an appeal, claiming error in the trial court’s finding that the MERS assignment is valid.

The Supreme Court confirmed, responding in part that it “resolved this issue in pdf Mruk v. MERS (56 KB) , where we held that a mortgage with the same language as the Breggias’ mortgage, ‘explicitly granted the power of sale to MERS and its successors and assigns.’” As such, “ … the assignee of MERS acquired all the rights which MERS possessed, including the statutory power of sale with the ability to foreclose.”

“This ruling once again confirms that MERS, as mortgagee, has the authority to make assignments,” said MERSCORP Holdings Vice President for Corporate Communications, Janis Smith. “MERS has authority to act on behalf of the lender – including the right to execute the assignments – and this authority is granted by plain language in the mortgage document signed at closing by the borrower.”

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.

Statement from MERSCORP Holdings, Inc.

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.

The United States Supreme Court has denied the review of Welborn, Doug et.al, v. Bank of New York Mellon, et. al., No. 13-1449 and the 5th Circuit Court of Appeals’ dismissal of the case will stand. We agree with the 5th Circuit’s finding that “[T]he recordings systems were not created to serve a revenue-generating function for the states,” and, that the recordings systems “... serve a governmental function,” which the Court notes is based on a public policy of providing notice of title. We believe that use of Mortgage Electronic Registration Systems, Inc. (MERS) as the recorded mortgagee is consistent with this purpose.

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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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