Lending Servicing

MERS mortgage authority upheld by New Hampshire Supreme Court

Assignment authority challenged by borrower


MERSCORP Holdings announced Friday that it secured another victory in a state’s highest court, as the New Hampshire Supreme Court upheld MERS’ mortgage assignment rights.

MERS, parent of the electronic mortgage registry with the same name, said that the Supreme Court of New Hampshire affirmed an earlier decision, which affirmed MERS authority to assign a mortgage.

According to a release from MERS, a borrower filed a wrongful foreclosure action against the Bank of New York Mellon claiming that the bank, as record mortgagee, did not have the authority to foreclose non-judicially under New Hampshire law without also providing evidence it held the borrower’s note.

A lower court granted the bank’s motion to dismiss, finding that the bank was an agent of the note holder with authority to foreclose because the bank was the assignee of the MERS mortgage.

According to MERS, the plaintiff appealed to the First Circuit Court of Appeals. The First Circuit certified two questions to the New Hampshire Supreme Court relating to whether New Hampshire law requires the foreclosing entity to possess both the note and mortgage at the time of the non-judicial foreclosure.

The New Hampshire Supreme Court then responded by determining that a similar case was “dispositive of the issues” in this case because both cases involved mortgages that created an agency relationship between MERS and the note holder and expressly granted MERS or the assignee of MERS “the power of sale and the right to foreclose and sell the mortgaged property.”

MERS said that the Court had already ruled that “an agent of the noteholder may properly institute foreclosure proceedings” according to New Hampshire law.

According to MERS, the language in a mortgage granted to MERS as the mortgagee as nominee for the lender and the lender’s successors and assigns evidences an agency relationship between the assignee of a MERS mortgage and the note holder.

“We are pleased that the Supreme Court of New Hampshire consistently recognizes the plain language in the mortgage agreement signed by a borrower at closing establishes the lawful agency relationship between MERS and a lender and its successors,” said MERSCORP Holdings Vice President for Corporate Communications Janis Smith. “The New Hampshire Supreme Court ruling recognizes MERS’ authority to take action on behalf of the lender, including assigning the mortgage.”


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