The Mortgage Electronic Registration Systems, and its parent company Merscorp, secured two favorable court rulings this week.
The first came from a U.S. District Court that sanctioned a foreclosure homeowner's attorney, while another was issued by an appellate court that rejected a party's wrongful foreclosure complaint.
In the first case, Blaylock v. Wells Fargo, a federal district court judge in Minnesota issued $75,000 in sanctions against Minnesota foreclosure attorney William Butler of Butler Liberty Law. Judge Ann Montgomery suggested in her ruling that Butler continued to file and litigate frivolous "show-me-the-note" cases in an attempt to stop foreclosures on the homeowners' behalf.
The show-me-the-note theory is one in which plaintiffs facing foreclosure argue that the firms seeking foreclosure "must produce the wet-ink signature note to foreclose on the property," according to Robert Mowrey, a partner at Locke Lord in Dallas. Mowrey, who was interviewed by HousingWire on this issue in January, said attorneys are watching all of the MERS rulings to determine what precedents will be established.
Butler declined to comment on the sanctions. But in a motion he filed two days ago, he expresses clear disagreement about whether any of the dismissals should hinge on the courts' show-me-the-note analysis.
Butler said in his motion that the court saw the claims as "show-me-the-note" cases when in fact he says his complaints alleged evidence of "fraud, inaccuracies and questionable practices."
In another case, the 10th Circuit Court of Appeals affirmed a lower court's dismissal of a wrongful foreclosure complaint filed against MERS and other parties. In Tadehara v. Ace Securities Corp., the court held that Utah laws do not prevent the beneficiary of a deed of trust or its assigns from possessing the power to foreclose on secured property on behalf of the lender or the lender's assignees.