Massachusetts bankruptcy judge, other courts validate MERS assignments
Mortgage Electronic Registration Systems, the real estate registry at the center of foreclosure litigation, says a U.S. Bankruptcy Court in Massachusetts validated a MERS title assignment this week despite the promissory note moving through a succession of owners. The case was decided by Bankruptcy Judge Melvin Hoffman who said "Massachusetts law allows a mortgagee with no interest in the underlying obligation to foreclose, the trustee's argument that MERS did not have a sufficient interest in the debtor's property to foreclose the mortgage fails." The judge added, "the fact the debtors' promissory note passed like a hot potato down a line of owners, including some in bankruptcy and liquidation, with no accompanying assignment of the note holders beneficial interest in the mortgage, changes nothing." "The court has taken note of MERS' unchanging role as mortgagee when a loan is transferred, and also noted that this role does not change unless and until MERS itself assigns the mortgage to another entity," the Reston-Va.-based company said. In Montana, the 13th District Court held that MERS was the proper beneficiary of a trust in the case, Waide v. U.S. Bank and MERS. MERS says the court found in the Montana case that the registry as "nominee for the lender and the lender's successors and assigns was the beneficiary of the Deed of Trust pursuant to statue and by agreement of the parties." Because of this ruling, Merscorp Vice President of Corporate Communications Janis Smith said "the court has acknowledged MERS' powers to act on behalf of a lender in Montana." In the Fifth Judicial District state court in Oregon, a judge ruled that MERS is the beneficiary of the deed of trust in in Somers v. Deutsche Bank (DB), according to MERS. The judge in the case held that MERS, as beneficiary, could assign the deed to Deutsche Bank without impacting the borrowers' rights and privileges. Write to Kerri Panchuk.