Mortgage

MERS wins in Rhode Island again

Rhode Island Supreme Court upholds MERS’ authority to assign mortgages

MERSCORP earned another legal victory against a disgruntled mortgagor who claimed that MERS didn’t have the authority to assign a mortgage.

The company announced Tuesday that the Supreme Court of Rhode Island agreed with its previous rulings on MERS-related cases and dismissed a case in which a borrower challenged MERS’ rights to assign a mortgage.

According to a release from MERS, Rhode Island’s highest court dismissed an appeal brought in Breggia v. Mortgage Elec. Reg. Sys., Inc. A lower Rhode Island court previously ruled in favor of MERS, but the plaintiffs filed an appeal, claiming that there were errors in the lower court’s findings.

The Supreme Court confirmed the lower court’s ruling, stating that it “resolved this issue in Mruk v. MERS, where we held that a mortgage with the same language as the Breggias’ mortgage, ‘explicitly granted the power of sale to MERS and its successors and assigns.’”

The Supreme Court added, “…the assignee of MERS acquired all the rights which MERS possessed, including the statutory power of sale with the ability to foreclose.”

MERS also secured a series of legal successes in October, when the Rhode Island Supreme Court dismissed a series of cases that challenged MERS’ mortgage assignment authority.

In deciding those cases, the Court stated that “it is well settled that MERS may serve as mortgagee without holding the promissory note and has the authority under the terms of the mortgage … to assign it.”

The Rhode Island victory is just the latest in a string of legal wins for MERS.

In August, the U.S. Court of Appeals for the Fifth Circuit also affirmed MERS’ authority to assign a mortgage in a case in which the plaintiff appealed the dismissal of his wrongful foreclosure suit, claiming, among other things, that the recorded security instrument “constituted a fraudulent claim against real property because MERS never acquired a security interest in the mortgage properties, and therefore, the recording denominating MERS as a beneficiary of the security instruments are fraudulent.”

Also in August, the U.S. District Court of Minnesota issued three rulings confirming lower court rulings that showed that Bank of America, Wells Fargo (WFC), and Bank of New York Mellon (BK) had all 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.

"This ruling once again confirms that MERS, as mortgagee, has the authority to make assignments,” MERSCORP Holdings Vice President for Corporate Communications Janis Smith said about the latest Rhode Island Supreme Court decision.

“MERS has authority to act on behalf of the lender – including the right to execute the assignments – and this authority is granted by plain language in the mortgage document signed at closing by the borrower.”

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