Reston, Virginia – July 28, 2014 – (RealEstateRama) — MERSCORP Holdings, Inc. today announced two recent decisions in favor of Mortgage Electronic Registration Systems, Inc. (MERS) from the United States Court of Appeals for the Fifth Circuit and the United States District Court for the Southern District of Texas. Both decisions affirmed MERS’ role as mortgagee, as well as the validity of its assignments.
In Staten v. Lex Special Assets, LLC, the U.S. District Court for the Southern District of Texas adopted the Magistrate’s Report and Recommendation and rejected the plaintiffs’ challenges to the MERS assignment based on a theory that MERS “was merely a vehicle for abusive trading of mortgage notes. …” Relying on the Fifth Circuit Court of Appeals’ decision in Farkas v. GMAC Mortgage, (5th Cir. 2013), which concluded that “MERS “‘qualifies as a mortgagee’” and does have the power to assign deeds of trust,” the U.S. District Court held that the plaintiffs cannot state a claim based on MERS’ authority to make assignments. Furthermore, the court held that the plaintiffs also lacked standing to challenge the validity of the mortgage assignment because they were not parties to the assignment.
Similarly, in Rojas v. Wells Fargo Bank, N.A., the U.S. Court of Appeals for the Fifth Circuit upheld the validity of the MERS assignment. The Court found that “there is no question that MERS, and its assignees, had the authority to foreclose on the property,” and noted that it has “repeatedly rejected similar attempts to challenge an assignee’s standing to foreclose under an assignment from MERS.”
“We are pleased with these decisions made by the U.S. District Court of Texas and the Fifth Circuit Court of Appeals,” said MERSCORP Holdings Vice President for Corporate Communications, Janis Smith. “These courts have upheld MERS’ authority and the validity of its assignments time and time again.”
For descriptions of cases and other materials pertaining to MERS’ business model and role in U.S. housing, please visit www.mersinc.org.
MERSCORP Holdings, Inc. is a privately held corporation that owns and manages the MERS® System and all other MERS® products. It is a member-based organization made up of thousands of lenders, servicers, sub-servicers, investors and government institutions. Mortgage Electronic Registration Systems, Inc. (MERS) serves as the mortgagee in the land records for loans registered on the MERS® System, and is a nominee (or agent) for the owner of the promissory note. The MERS® System is a national electronic database that tracks changes in mortgage servicing and beneficial ownership interests in residential mortgage loans on behalf of its members.
CONTACT: Janis Smith
Email: janiss (at) mersinc (dot) org