Texas court upholds MERS right to claim lien

Electronic registry countersued for its rights

MERSCORP Holdings announced the Dallas County District Court, 101st Judicial District, issued a final judgment in MERS’ favor.

The ruling confirms the right of MERS as beneficiary, to notice of a lawsuit under the United States and Texas Constitutions.

MERSCORP runs a private database of mortgage liens for use within the industry. Mortgage Electronic Registration Systems (MERS) serves as the mortgagee in the land records for loans registered on said MERS System.

The company faced numerous legal challenges in the wake of the housing crisis.

It usually wins those legal challenges, here's some of the many victories.

In today's ruling, Summit Residential Services acquired an interest in the subject property following a foreclosure sale conducted by a homeowner’s association.

However, the property remained encumbered by a deed of trust granted to MERS by the borrower in 2002.

Summit filed a lawsuit seeking clear title to the property, by naming only the original lender.

According to a statement, MERS was neither named in nor provided notice of the action and Summit was granted judgment in its favor extinguishing the MERS lien.

So, MERS countersued in April 2104, and won.

Here's what happened briefly, from the MERSCORP statement:

"As record trust deed beneficiary, MERS argued it was a necessary and indispensable party to any lawsuit affecting the real property, and under the due process guarantees afforded by the United States and Texas Constitutions it could not be deprived of its protected property interest without an opportunity to be heard. The court agreed with MERS and a Final Judgment was entered vacating Summit’s judgment and reinstating the MERS deed of trust on the property.

The Final Judgment decreed the MERS deed of trust was not discharged or released by Summit’s earlier lawsuit and that the property is still subject “to any valid, senior lien or encumbrance, including the [MERS] Deed of Trust.”

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