Lending

MERS secures another legal victory

Rhode Island Supreme Court upholds MERS’ mortgage assignment authority

gavel

MERSCORP has come out victorious in another set of legal battles that saw disgruntled mortgagors that claim that MERS didn’t have the authority to assign a mortgage.

The company announced Thursday that the Supreme Court of Rhode Island dismissed a series of appeals, in which borrowers had challenged MERS’ authority to hold or assign mortgage interests and promissory notes under Rhode Island state law.

According to release from MERS, Rhode Island’ highest court dismissed O’Leary v. Mortgage Electronic Registration Systems, Inc.; Casimiro v. Mortgage Electronic Registration Systems, Inc.; Dennis v. Quicken Loans, Inc.; Moura v. OneWest Bank, FSB; and, Woodruff v. Mortgage Electronic Registration Systems, Inc., stating “it is well settled that MERS may serve as mortgagee without holding the promissory note and has the authority under the terms of the mortgage … to assign it.”

The Supreme Court cited its previous rulings in Ingram v. Mortgage Elec. Reg. Sys., Inc. and Bucci v. Lehman Bros. Bank, FSB, as cause for the dismissals.

“We are most pleased that Courts in Rhode Island continue to uphold MERS’ rights to serve as mortgagee,” said MERSCORP Holdings Vice President for Corporate Communications, Janis Smith. “These rulings are generally consistent with case law throughout the country.”

Additionally, the Federal District Court for the District of Rhode Island found in MERS’ favor in Alves v. Mortgage Electronic Reg. Sys., Inc., finding that the argument that the MERS assignment was void because MERS did not have the note. The court ruled that the plaintiff lacked standing to challenge an assignment because the assignment allegations were merely voidable—not void—allegations.

Additionally, the Court pointed to previous Rhode Island Supreme Court Decisions in Bucci and Moura v. Mortgage Electronic Registration Systems, Inc. and noted that these Decisions “validated the MERS System and MERS’ role as nominee on behalf of the note owner.”

The victories are the latest in a string of triumphs for MERS.

In August, the U.S. District Court of Minnesota issued three rulings confirming lower court rulings that showed that Bank of America, Wells Fargo (WFC), and Bank of New York Mellon (BK) had all established unbroken chains of title under Minnesota law by producing mortgages in which MERS was named the original mortgagee and subsequent assignments by MERS to the foreclosing entities.

Earlier in August, the U.S. Court of Appeals for the Fifth Circuit also affirmed MERS’ authority to assign a mortgage in a case in which 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.”

In July, the U.S. Court of Appeals for the Ninth Circuit affirmed a ruling in a similar case. In Mickelson v. Chase Home Finance LLC, the plaintiffs sought to invalidate a completed foreclosure sale by alleging Consumer Protection Act claims against MERS as well as Deed of Trust Act violations against the foreclosing trustee, Northwest Trustee Services, Inc

The Court of Appeals ruled in MERS’ favor in that case as well.

And in June, the U.S. Court of Appeals for the First Circuit and the Massachusetts Superior Court both affirmed dismissals of wrongful foreclosure lawsuits, both of which had challenged MERS’ authority to assign a mortgage.

Reprints

Services Guide

Comments powered by Disqus