A U.S. District Court in Iowa ruled Mortgage Electronic Registration Systems did not violate the state's recording statutes when it made various mortgage assignments.

The case is not precedent, but rather shows how one federal judge views MERS' role in the mortgage assignment process. The mortgage registry is fighting dozens of cases filed by local counties claiming owed recording fees on mortgage assignments.

As part of their claim, Plymouth County cited Iowa Code § 558.45 which states: "where any mortgage, contract, or other instrument constituting an encumbrance upon real estate shall be assigned or released by a separate instrument, it shall be the duty of the recorder to make a notation where the instrument was originally indexed, indicating the nature of such assignment or release and a document reference number of the record where the same is recorded."

But the U.S. District Court for the Northern Division of Iowa-Western Division says the statute does not impose a duty or requirement "on a mortgagee or assignee to record an assignment; what it plainly does is impose upon the recorder a duty to record any such assignment presented to the recorder."

MERS believes the case highlights arguments they've raised in other counties were MERS recording fees became an issue.

"We have consistently held that there is no basis for these suits, and the Iowa court has affirmed this by pointing clearly to the absence of any statutory requirement to record mortgage assignments," said Janis Smith, MERSCORP's vice president of corporate communications. "Iowa is the third state to rule on a claim like this, and all have granted our motions to dismiss."

kpanchuk@housingwire.com