A bank can foreclose on a home in which MERS serves as the deed of trust beneficiary as soon as the foreclosing bank holds the note and obtains a proper mortgage assignment from MERS, the Nevada Supreme Court ruled this week.

The Mortgage Electronic Registration Systems, or MERS, lauded the Edelstein v. Bank of New York Mellon ruling, saying the seven-member court created statewide precedent by establishing when MERS as beneficiary of the deed of trust has foreclosing authority.

The court wrote, "[w]hen MERS is the named beneficiary and a different entity holds the promissory note, the note and the deed of trust are split, making non-judicial foreclosure by either improper."   But, the court found a major exception once the promissory note and deed of trust are reunited.

Under this structure, once the foreclosing bank receives an assignment from MERS and holds the promissory note, the financial firm can move forward with a foreclosure and be okay in the state of Nevada, MERSCORP, the parent of MERS, said Monday.

In the Edelstein case, MERS assigned the deed of trust to Bank of New York Mellon as trustee for Countrywide. Once the trust had both the promissory note and the assignment, it possessed the standing to foreclose, the justices held.

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