Mortgage Electronic Registration Systems Inc.
has the right to assign a security deed and foreclose on a property that becomes part of the securitization process, the U.S. Court of Appeals for the 11th Judicial Circuit held in a new opinion.
In Smith v. Saxon Mortgage Services
, the 11th Circuit in Atlanta agreed with U.S. Magistrate Judge Janet F. King in her finding that the language included in a Georgia security deed gives MERS the authority to act on behalf of current and future owners of the mortgage.
That distinction is significant since Reston, Va.-based company is the main recording system used to document the transfer of mortgages throughout the securitization process.
"A significant body of clear and specific federal case law is coming together with this decision from the 11th Circuit Court of Appeals, along with favorable rulings" from six other appellate courts and U.S. District Courts," said Janis Smith, vice president of corporate communications for Merscorp Inc.
"The 11th Circuit’s ruling underscores the soundness of MERS’ business model by solidifying the legality of MERS’ role in the security deed, explaining how that role came about, and clarifying MERS’ power to act on behalf of the lender," according to Smith.
Write to Kerri Panchuk