The U.S. District Court for the District of Minnesota issued rulings in three cases that are favorable to Mortgage Electronic Registration Systems.
The court held that the foreclosing entities who were the named defendants in the cases established unbroken chains of title under Minnesota law by producing mortgages in which MERS was named the original mortgagee and subsequent assignments by MERS to the foreclosing entities.
The plaintiffs lacked standing to challenge the assignments by MERS and, based upon the unbroken chains of title, the foreclosures were proper.
Each of the cases, Smith v. Bank of America; Her vs. Wells Fargo, and Jaakola v Bank of New York Mellon, included a request for an order quieting title in the names of the plaintiffs.
In the court’s report and recommendations, Magistrate Judge Janie Mayeron determined that the quiet title counts failed for several reasons.
The record in each case showed “an unbroken chain of title through a recorded assignment of mortgage from MERS to [the foreclosing party].”
Mayeron held that because the chain of title was clear, there were no missing assignments, as the borrowers alleged, and the foreclosures were proper. Also, relying on precedent from this court and the Minnesota Court of Appeals, Mayeron, referring to Pooling and Service Agreements, held that “documents governing mortgage-backed trusts often do not require a chain of written mortgage assignments when, as here, MERS is named the nominee of the lender and is listed as the Mortgagee.”
Mayeron also held that the plaintiffs lacked standing to pursue their quiet titles claim because they suffered no injury as a result of the assignments by MERS or the application of trust terms to their mortgages.
The U.S. District Court for the District of Minnesota adopted Mayerson’s report and recommendations in the Smith case on July 7, 2014, and in the Jaakola case on August 15, 2014.
“These favorable rulings continue to support the acceptance under Minnesota law that an assignment by MERS is effective in Minnesota and that there is no break in title when MERS is named as original mortgagee and later assigns its interest,” said MERSCORP Holdings Vice President for Corporate Communications, Janis Smith.