A U.S. District Court in Texas released an opinion this week defending the Mortgage Electronic Registration Systems' (MERS) role in certain foreclosure processes.
U.S. District Judge Sam Sparks with the Western District of Texas held that state law says "foreclosure enforces the deed of trust, not the underlying note."
The distinction, while not necessarily precedential, gives an interpretation of how complaints against MERS when a foreclosure has taken place will be sized up under Texas law.
In the case, which is titled Bridges v. J.P. Morgan Chase, the judge denied the plaintiff's claim that the promissory note and deeds of trust were not properly transferred, leaving MERS and subsequent assignees without foreclosing authority.
The judge also dismissed the plaintiff's case, saying the homeowner was not a party to the mortgage assignment; therefore, she lacked the legal standing to challenge it.
"What's important to note here is Judge Sparks’ clear and unambiguous validation of MERS’ role in assigning mortgages," said Janis Smith, MERSCORP Holdings vice president of corporate communications.
"It is also worth noting that he went to great lengths to explain the different elements of a mortgage – the promissory note and the deed of trust – and how Texas law addresses each in the foreclosure process."