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Alabama Supreme Court MERS decision: Attorney guidepost

The highest court in Alabama upheld a lower court opinion that previously validated the ability of Mortgage Electronic Registration Systems to legally assign a mortgage. The decision creates precedent in Alabama, giving MERS a strong legal buffer in the state when similar challenges arise in foreclosure disputes.

In the original case, the homeowners challenged MERS ability 'to assign a mortgage or take other actions as the nominee for a lender and the lenders’ assigns.'

The court rejected those claims, with the Alabama Supreme Court affirming its decision without challenging the initial analysis supplied by the lower court.

The original decision concluded that a previous appellate court case in Alabama — Crum v. LaSalle — established that MERS has the ability to assign or take actions in regards to a mortgage as a nominee for a lender and the lender’s assigns.

The case challenged a foreclosure that was processed with the property eventually conveyed to Fannie Mae after foreclosure sale.

The homeowners challenged the underlying foreclosure, claiming MERS involvement in the assignment of the mortgage invalidated the process.

The court disagreed and the Alabama Supreme Court affirmed the lower court's opinion.

Alabama joins Nevada – a state where the supreme court has already ruled in two separate cases that an assignment from MERS does not invalidate a foreclosure.

The Rhode Island and Idaho Supreme Courts also released opinions upholding MERS foreclosing authority. 

When the MERS legal battles began it was a question of how the courts would interpret the registry's role in the real estate assignment process.

The state Supreme Court cases offer a guidepost for foreclosure and banking attorneys dealing with MERS disputes in those states today.


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