The Appeals Court of Massachusetts found in favor of Mortgage Electronic Registration System and upheld the validity of its assignment of a mortgage.
This is the latest in a long string of legal victories for MERS, as covered in the April issue of HousingWire magazine.
In Hoyt v. BAC Home Loan Servicing the borrowers challenged the lower court’s finding that MERS’ assignment was valid.
“MERS has legal authority to execute mortgage assignments,” said MERSCORP Holdings Vice President for Corporate Communications, Janis Smith. “This authority is granted by plain language in the mortgage document signed at closing by the borrower.”
In its opinion, the Appeals Court confirmed that the legal interest in a mortgage may be separated from the beneficial interest in the debt it secures under Massachusetts law. It went on to find that MERS’ assignment was valid and conveyed the legal interest in the mortgage to the foreclosing entity because MERS held the record legal interest in the mortgage when it executed the assignment.
In addition, the Appeals Court found that the foreclosing entity, as assignee of the mortgage, had the right to foreclose because at the time that this foreclosure was initiated, there was no requirement that the foreclosing entity also hold the note. Moreover, the Appeals Court held that the lower court did not err in finding that the borrowers lacked standing to challenge the assignment.