MERS Gets Win in New York
The New York Court of Appeals today unanimously ruled that the MERS mortgage is a valid method of transferring rights from the borrower to MERS. The Court affirmed the Appellate Division's decision that county clerks must record MERS mortgages, assignments and lien discharges as required by New York Real Property Law. In a 7-0 decision, the Court found that the model MERS mortgage and mortgage assignment "satisfies the limited requirements of the recording statute," concluding that "the County Clerk must accept the MERS mortgage when presented for recording." In addition, the Court also decided that MERS discharges comply with New York law, and that "the County Clerk is required to accept MERS assignments and discharges for recording." "This decision reaffirms the legal premise upon which MERS was created," said R.K. Arnold, MERS President & CEO. "We are happy to have this litigation behind us and we look forward to working with county clerks to deliver the benefits of electronic commerce to homebuyers." "MERS would like to thank Fannie Mae, Freddie Mac, the American Land Title Association and the Mortgage Bankers Association," added Arnold. "Their support and confidence throughout this litigation has been invaluable." MERS is an industry utility created to design and operate the MERSÂ® System, an electronic loan registry that eliminates the need for assignments when trading mortgage loans. Borrowers name MERS as mortgagee and nominee for the lender on deeds of trust and mortgages that are recorded in the county land records. Lenders then register the loans on the MERSÂ® System and electronically track changes in servicing and beneficial ownership rights over the life of the loan.