The Mortgage Electronic Registration Systems, or MERS, registry possesses the power to foreclose as long as it's listed on the security deed as nominee for the original lender and any of the lender's successors, a U.S. District Court Judge out of Atlanta ruled this week.
The case – Crutcher v. CitiMortgage – involves a common situation that occurs when the original lender sells a loan off to other banking institutions, naming the MERS registry as nominee for the lender and its successors.
A homeowner dealing with foreclosure claimed in the Crutcher case that MERS and CitiMortgage (C), which eventually became the foreclosing party, never had the authority to foreclose since MERS did not possess the authority to assign the security deed to CitiMortgage.
The plaintiff, or homeowner, suggested that Irwin Mortgage took over the loan early on, and MERS and Citi never officially obtained foreclosing authority.
However, the federal judge ruled against this theory holding that "as grantee, MERS has the power of sale and the right to exercise any or all of [Lender’s and Lender’s successors and assigns’] interests, including, but not limited to, the right to foreclose and sell the property; and to take any action required of lender including, but not limited to, releasing and canceling this security instrument."