One of the more popular claims made by homeowners suing the Mortgage Electronic Registration Systems, or MERS, failed to get passed the California Court of Appeals this past week.

In the Taasen v. Family Lending Services case, the appellate court upheld a lower court's decision by finding even though MERS did not have physical possession of the original note, it still could initiate a non-judicial foreclosure as long as it was the nominated beneficiary of the deed of trust, MERS said.

"MERS' authority to assign mortgages has been upheld in hundreds of lawsuits," said Janis Smith, vice president of corporate communications for MERS. "Not only has the notion that MERS doesn't have authority to assign been routinely rejected as baseless by courts, including multiple courts in the California system, it's also an ineffective strategy for avoiding foreclosure after default."

The case involves an argument often made by homeowners that MERS cannot foreclose on a homeowner unless they possess the actual note.