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Sixth Circuit upholds dismissal of MERS case

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A lawsuit filed by a homeowner against Mortgage Electronic Registration Systems, or MERS, failed to gain traction at the Sixth Circuit Court of Appeals this week.

Instead, the Sixth Circuit agreed with a lower court, throwing out allegations of robo-signing made by the homeowner as well as claims that MERS lacked standing.

The judge agreed with a lower court, dismissing the key claims made in Conlin v. MERS case,  said  Tom Schehr, leader of the Financial Services Litigation Practice Group at Dykema Gossett.

Schehr views the decision as significant "because the sixth circuit rejected the case at the pleading stage and specifically rejected claims of robo-signing and a forged assignment by MERS."

As for why it was thrown out, "they (the plaintiff) didn’t state a claim for robo-signing," explained Schehr.

On the robo-signing issue, the court ruled "it is apparent that neither of plaintiffs theories – the robo-signed assignment or MER’s incapacity to assign – can support this action."

The Sixth Circuit added, "Even were the assignment from MERS to U.S. Bank invalid, thereby creating a defect in the foreclosure process under (state law) plaintiff has not shown that he was prejudiced."

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