MERS, a Blast from the Past

Remember 2010-2011 and the daily revelations about robosigning?rn Behind the shortcuts taken by servicersrnin processing foreclosure documents (sometimes even employing forgery) was theirrnpolicy of recording mortgages and notes in the name of Mortgage Electronic RegistrationsrnSystems, Inc. (MERS) to avoid recording subsequent assignments to individualrnlenders or servicers when loans were sold or servicing rights transferred.  This practice facilitated sales and transfersrnand avoided the cost of making assignments but became problematic when thosernloans fell into default and the chain of title became unclear.  </p

When robosigning hit the headlines and it appeared thatrnlenders had foreclosed on loans that they technically did not own or had foreclosedrnin the name of MERS when only the mortgage but not the note had been assigned there,rnthe lawsuits began.  Virtually everyrnmonth there was a decision in some court or another regarding MERS and ultimatelyrneach upheld the right of lenders to assign to the company and the legality ofrnthe foreclosures.</p

It has been quiet for a while but RealtyTrac reports thatrnthe lawsuits go on, and two more were recently decided, both on appeal and bothrnin favor of MERS.  </p

In West Virginia the state’s Supreme Court of Appealsrnreversed a lower court’s decision in W. Va.rnv. Warren McGraw in which Wyoming County claimed that the recording ofrntrust deed assignments in county record books is required by state law “inrnorder to clear title to properties in the Counties.”  The higher court ruled that the state’srnstatutes do not require such county level recording.  While MERS was not specifically named in thernsuit, RealtyTrac said the allegations were focused on the company’srnoperations.  </p

A second suit in the Ninth Circuit Court of Appeals upheld arndistrict court ruling in Tung Q Lam v.rnJPMorgan Chase Bank NA et al, a suit brought by a homeowner contesting a foreclosure</bof his home carried out in the name of MERs after the note was subsequentlyrnassigned to others.  The Court said thatrnMERS could assign the deed of trust because it contained authorization for MERSrnto exercise any or all of the lender's interests.