A major Nevada Supreme Court decision titled Edelstein v. Bank of New York Mellon is the basis for two homeowners losing their cases after challenging the Mortgage Electronic Registration Systems’ role in their home foreclosures.

The state’s highest court ruled in favor of MERS in both the Ashley v. MERS and the Sanchez v. OneWest Bank cases this week. 

In both cases, the Supreme Court leaned on its previous MERS-related ruling in the Edelstein v. Bank of New York Mellon case.

In that decision, the justices said “when MERS is the named beneficiary and a different entity holds the promissory note, the note and deed of trust are split, making nonjudicial foreclosure by either improper. However, any split is cured when the promissory note and the deed of trust are reunified.”

And in Edelstein, the Nevada Supreme Court said the two were in fact reunified, giving the foreclosing party authority to foreclose while also upholding MERS’ role as a valid beneficiary of the deed of trust.

In the Sanchez case, the court cited Edelstein as the basis for its decision and held a lower court was correct in dismissing claims against MERS and The Bank of New York Mellon for wrongful foreclosure because the note and the deed of trust had been reunified prior to the mortgage default.  

Then, in the Ashley case this week, the Nevada Supreme Court reaffirmed its view of MERS as a valid beneficiary that can transfer the deed of trust and the promissory note, while maintaining power to appoint a trustee for the deed of trust.

The court held in Ashley that “because the beneficial interest in the deed of trust and note were both held by U.S. Bank before the trustee’s sale, and the trustee’s sale was conducted by the duly appointed substitute trustee, we see no defect in the trustee’s sale.”

The Nevada Supreme Court’s new decisions show the Edelstein case becoming precedent in state cases involving issues related to MERS’ role as a beneficiary of the deed and the splitting of the note and deed prior to a foreclosure proceeding.

kpanchuk@housingwire.com

 

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