A U.S. District Court in Georgia ruled in favor of the Mortgage Electronic Registration Systems this week, holdings MERS is able to transfer a security deed on to CitiMortgage without transferring the actual note. Allowing this construction essentially gives CitiMortgage the right of foreclosure, which was one of the key issues in the case. The case — Higgs v. Pendergast — challenged a foreclosure on several issues, but focused specifically on the MERS process. The  plaintiffs alleged CitiMortgage did not have a right to foreclose. The court held that Georgia law did not require that the note be transferred to CitiMortgage in order for the company to have a right to enforce the security deed. “Judge King’s decision affirms MERS’ legal interest in the security deed and its ability to assign its interest prior to foreclosure by a lender or servicer,” said Janis L. Smith, MERSCORP vice president of corporate communications, in a statement. “The court’s decision also adds to the growing body of case law that shows the legality of the MERS business model in Georgia.” Write to Kerri Panchuk.

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