U.S. Court of Appeals for the Fifth Circuit Affirms Precedent in MERS’ Favor

Affirms MERS Authority to Assign Mortgage 


CONTACT: Janis Smith
Phone: 703-738-0230
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Reston, Virginia, August 19, 2014—MERSCORP Holdings, Inc. today announced the U.S. Court of Appeals for the Fifth Circuit relied upon its precedent in prior rulings that MERS has the authority to assign the mortgage lien as its basis for affirming the dismissal of a wrongful foreclosure lawsuit.

In pdf Reese v U.S. Bank Natl Assn , the plaintiff appealed the dismissal of his wrongful foreclosure suit, claiming, among other things, that the recorded security instrument “constituted a fraudulent claim against real property because MERS never acquired a security interest in the mortgage properties, and therefore, the recording denominating MERS as a beneficiary of the security instruments are fraudulent.” The plaintiff went on to allege that the bank lacked standing when it foreclosed on his property because MERS lacked the ability to assign the Deed of Trust.

The Fifth Circuit Court based part of its opinion on its previous ruling in pdf Golden v Wells Fargo Bank , finding that the plaintiff failed to state a claim under the fraudulent lien statute (§12.002 of the Texas Civil Practice & Remedies Code) by failing to plead facts sufficient to show that the Bank intended to cause injury by its use of an assignment.

Further, the standing claim was precluded by Fifth Circuit precedent, “Our Court has expressly recognized that MERS may assign a deed of trust to a third party and that such assignments confer the new assignee standing to non-judicially foreclose on property associated with that particular deed of trust.” See  pdf Martins v. BAC Home Loans Servicing (102 KB) .

“We are pleased with this decision made by the U.S. District Court of Texas and the Fifth Circuit Court of Appeals,” said MERSCORP Holdings Vice President for Corporate Communications, Janis Smith. “These courts have upheld MERS’ authority and the validity of its assignments time and time again.”

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.