MERS Has Authority to Act as the Agent of Valid Note Holder

United States District Court Grants MERS’ Motion to Dismiss


CONTACT: Janis Smith
Phone: 703-738-0230
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Reston, Virginia, May 15, 2014—MERSCORP Holdings, Inc. today announced that the United States District Court for the Middle District of Tennessee ruled that MERS has the authority to act as the agent of any valid note holder and granted MERS’ motion to dismiss.

In pdf Thompson v. American Mortgage Express Corp. Thompson v. American Mortgage Express Corp. (43 KB) , the borrower alleged there was a cloud on her title because her loan had been securitized and therefore none of the named defendants in the case held any interest in the property. The borrower also alleged that MERS had no right to assign her mortgage because MERS was only the nominee for the original lender, not the subsequent purchasers of the note.

Relying on an earlier decision of the United States Court of Appeals for the Sixth Circuit which affirmed the MERS business model, United States District Judge Todd J. Campbell said in his opinion, “Courts have consistently upheld the validity of MERS’s role as nominee for a promissory note’s lenders and assigns and as beneficiary under a deed of trust.” See pdf Dauenhauer v. Bank of New York Mellon , 2014 WL 1424494 (6th Cir. April 15, 2014). He found that MERS therefore could legally assign the mortgage as the nominee for such subsequent note holders.

“Courts continue to rule that MERS has legal authority to act on behalf of the lender and the lender’s successors and assigns, including the right to execute an assignment,” said MERSCORP Holdings Vice President for Corporate Communications, Janis Smith. “Courts recognize that 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


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.