MERS Posts Yet Another Court Victory

The New Hampshire State Supreme Court handed down the latest in a string of victories for Mortgage Electronic Registration Systems (“MERS”), continuing a trend which has bolstered the legitimacy of the MERS framework, as the primary tool for the recording of residential mortgage files in the United States.

The latest court decision in favor of MERS came this week from the same court which upheld a July 2015 decision that the language in a mortgage granted to MERS as the mortgagee as nominee for the lender and the lenders successors and assigns, evidences an agency relationship between the note holder and the assignee of a MERS mortgage.

In the case of Castagnaro v. The Bank of New York Mellon, the borrower filed a wrongful foreclosure action, claiming that BNY Mellon lacked the authority to foreclosure non-judicially under New Hampshire state law without also proving that it was the holder of the borrower’s note.  The Supreme Court referred the First Circuit Court to its opinion in Bergeron v. N.Y. Community Bank, issued in July 2015, which involved answering similar questions on the law pertaining to foreclosure.  Both cases involved mortgages creating an agency relationship between MERS and the noteholder and granted expressly to MERS (or whomever MERS assigns) “the power of sale and the right to foreclose and sell the mortgaged property,” according to an announcement made by MERSCORP Holdings, Inc.

MERS has won a number of court decisions over the past year, in cases that challenged its right to act as mortgagee.  Last fall, MERS won similar decisions in Montana, Georgia, New York, Texas and Kentucky.  This has had the affect of further solidifying the credibility of this industry authorized platform for enhancing the efficiency of what was historically viewed as a very cumbersome process.

Chalk this up as another victory for rationality!

About markferraris
Managing Principal Orchard Street Partners LLC

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