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New York Supreme Court upholds MERS ability to foreclose

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The Supreme Court of the State of New York ruled in favor of Mortgage Electronic Registration Systems last week, validating the company's ability to foreclose on a mortgage and assign it. Judge Lucindo Suarez found in the case Bank of New York v. Sachar the Bank of New York Mellon has standing to foreclose based on a MERS assignment and the delivery of the note. Suarez said in his ruling the bank showed enough documentation to do so. "Plaintiff has shown that the assignment of the mortgage was not made retroactively," Suarez wrote. "Although the assignment refers only to an assignment of the mortgage, physical delivery of the note is sufficient to transfer the obligation, and plaintiff has established that the note was delivered to it prior to the commencement of this action." Adam Levitin, associate professor of law at Georgetown University, said the case could still go to the Court of Appeals, the top court in the state. "This ruling muddies the waters, but doesn’t really change things," Levitin said. A judge in a lower New York bankruptcy court ruled in February that MERS had no right to transfer the mortgage and thus no right to foreclose on the loan. In the middle of February, MERS told its members not to foreclose on residential mortgages in its name. Consumer attorneys across the country continue to challenge this ability, but victories for MERS continue to emerge. MERS has already won cases in New Hampshire, California and Kansas. However, Virginia legislators are pushing to phase out the company and its role in tracking Ginnie Mae guaranteed mortgages. Write to Jon Prior. Follow him on Twitter: @JonAPrior

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