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MERS victorious in Georgia federal and state courts

Ability to assign a mortgage upheld again

MERSCORP Holdings, Inc. won again in two separate courtrooms in Georgia recently, continuing its string of winning legal challenges to its ability to assign a mortgage.

According to a release from MERS, the United States District Court for the Northern District of Georgia recently dismissed a quiet title claim in Dean v. Mortgage Elec. Registration Sys.

In that case, the plaintiffs filed a quiet title suit against MERS and other defendants. In dismissing the claim, the court noted that the plaintiffs admitted that they executed a security deed in favor of MERS, who held record title and later assigned its interest.

Therefore, the plaintiff cannot bring a quiet title claim because they do not hold record title, the court found. In his decision, Judge Mark H. Cohen of the United States District Court for the Atlanta Division of the Northern District of Georgia, found that MERS and its assignee had a valid interest in the security deed and determined that, “on the basis of the facts alleged, plaintiffs’ complaint is frivolous and fails to state a claim on which relief can be granted.”

Additionally, MERS also secured a victory in Georgia State court in Johnson v. Mortgage Elec. Registration Sys. Inc.

In that suit, the plaintiff alleged the MERS security deed was unenforceable and MERS assignment to GMAC was invalid because it contained an erroneous legal description of the property.

In his opinion, Judge John J. Goger with the Fulton County Superior Court ruled that the security deed plaintiff executed in favor of MERS and that was subsequently transferred to GMAC is “valid and binding.”

Goger also wrote,  “The court reasoned that the error in the legal description had no effect on the validity of security deed because it was merely a typographical error, and MERS and its assignee therefore had authority under the security deed to enforce its terms.”

Both decisions cited a 2013 Georgia Court of Appeals decision, Montgomery v. Bank of America, which affirmed that MERS, as the grantee named in the security deed, has an interest in and the authority to assign the security deed.

“We are pleased to see the validity of MERS’ role as grantee under the security deed is becoming well established in Georgia law and that claims to the contrary are being rejected as frivolous,” said MERSCORP Holdings Director, Corporate Communications, Sandra Troutman. “Courts in Georgia and across the country are consistently holding that MERS has a valid interest in security instruments and the authority to assign that interest.”

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