MERS wins twice in Texas federal courts

Right to assign deed upheld again

MERSCORP Holdings announced Thursday that it secured a pair of victories in federal court, as two United States District Courts in Texas recently upheld MERS’ mortgage assignment rights.

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 the MERS System, and the company has faced repeated legal challenges over its mortgage assignment authority.

But, the company often proves victorious in court, some of those victories can be read about here.

And MERS won again recently, as the United States District Courts for the Southern District of Texas, Houston Division and the Northern District of Texas, Dallas Division held MERS’ mortgage assignments were valid, and granted motions to dismiss in two cases.

In one case, Campo v. Bank of America, the plaintiff filed a lawsuit against MERS, alleging that the MERS assignment of the deed of trust was invalid because MERS did not have any enforceable interest in the deed of trust, which meant that the MERS assignment failed to transfer any rights to the assignee.

The U.S. District Court for the Southern District of Texas relied on previous ruling, stating, “Our Court has expressly recognized that MERS may assign a deed of trust to a third party and that such assignments confer the new assignee standing to non-judicially foreclose on property associated with that particular deed of trust.”

In a similar case, Rivers v. Bank of America, the U.S. District Court for the Northern District of Texas, Dallas Division found that “given that the Deed of Trust in this case names MERS as the beneficiary, and because MERS subsequently assigned the Deed of Trust to the Defendant, this assignment transferred all rights in the Deed of Trust, including the right to foreclose on the Property.”

MERSCORP Holdings Vice President for Corporate Communications Janis Smith said that MERS is “pleased” with the courts’ decisions.

“We are pleased that both courts continue to recognize that MERS has a valid interest in the deed of trust and has the right to assign that interest to third parties,” Smith said. “These rulings are consistent with other decisions in Texas and in courts throughout the country.”

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