Case against MERS reaches Supreme Court
A controversial case challenging the ability of Mortgage Electronic Registration Systems to foreclose on a California man was filed with the Supreme Court Monday, making it the first major MERS case to reach the nation's highest court.
If the Supreme Court agrees to hear Gomes v. Countrywide, Gomes' attorney, Ehud Gersten, says the court will have to decide whether a lower court stripped his client, Jose Gomes, of due process by allowing MERS to foreclose without ensuring the registry had the noteholder's authority to foreclose.
"I believe this to be the first case in the country to take MERS to our Supreme Court," Gersten told HousingWire. His claim could not be immediately verified.
"Ultimately, what this case is saying is if you are going to be taking someone's home away from them, do you have the proof or the right to do so?" Gersten said. "If the Supreme Court starts to question MERS, and its business structure, it is going to have an effect on every MERS case in the country."
MERS, the electronic registry at the center of the foreclosure crisis, has been under fire nationwide as foreclosure attorneys purport the firm, and its parent company Merscorp Inc., illegally foreclosed on properties.
Gersten, meanwhile, said MERS has a brief period of time to respond before the Supreme Court decides whether it will accept the case (click here for the filing).
Attorneys familiar with the Gomes case are not optimistic about its chances of being heard by the Supreme Court.
"While recent statistics show that the Supreme Court takes on average less than 3% of cases on certiorari, it takes even a smaller percentage of those advanced by private litigants, as opposed to the government," said Patton Boggs attorney Anthony Laura. "Also it takes fewer cases out of the state court system than it does out of the federal Courts of Appeals."
"So, the likelihood that this case will be taken is slim indeed," Laura adds. "I believe those slim odds are even slimmer because the argument Gomes is making to the U.S. Supreme Court is one he did not previously raise."
Laura said that, as a premise for invoking the jurisdiction of the Supreme Court, Gomes claims that the court below abridged his 14th Amendment rights.
"My recollection is that Gomes never made a Constitutional argument below, neither in the California Court of Appeals nor in the petition for review to the California Supreme Court," he said. "In my view, the U.S. Supreme Court will look skeptically on his just raising that argument now."
The original plaintiff, Jose Gomes, appealed to the nation's highest court after California's Supreme Court decided not to review the 4th Appellate District Court of California's decision in favor of MERS.
Gomes' petition says he's challenging the foreclosure because MERS "did not have the current noteholder's authority to foreclose."
Gersten argues his client "was entitled to proof that the loan servicer, trustee or an entity such as MERS, either named in the deed of trust or acting through assignments of interest, had legal authority on behalf of the promissory note's current holder to foreclose."
The 4th Appellate District Court's decision, which Gomes wants overturned, held MERS had the authority to initiate a foreclosure on Gomes because the deed of trust "explicitly provided MERS with the authority to do so," according to court records.
The state appellate court also ruled in favor of MERS after finding the deed of trust contained no language to suggest the "lender or its successors and assigns must provide Gomes with an assurance that MERS is authorized to proceed with a foreclosure," according to court records.
MERS chose not to comment on the case, but a spokeswoman said the company is aware of the filing with the Supreme Court.
Write to Kerri Panchuk.
Don’t miss out: get HW delivered via email
- Current Chg.
- NASDAQ 3498.97 33.722 ^ixic
- S&P 500 1666.29 -1.18 ^gspc
- Volatility Index 13.02 0.57 ^vix
- KBW Mort. Financial Index 33.14 -0.11 ^mfx
- MSCI US REIT Index 1063.41 1.82 ^rmz