Massachusetts became the latest state to award victory to MERSCORP Holdings, Inc., in a series of lawsuits challenging MERS' authority to assign titles.
MERS announced on Tuesday that the Commonwealth of Massachusetts Superior Court issued a ruling in Gardner v. Mortgage Electronic Registration System, Inc., that MERS could act as the mortgagee even though it is not the holder of the note. The lawsuit alleged that MERS, acting as the original lender's nominee and not the holder of the note, did not have the authority to transfer the note, making the transfer invalid.
The lawsuit further alleged fraudulent recording and execution assignment of the note after foreclosure on the property began.
In issuing the Massachusetts ruling, Justice Edward J. McDonough cited several legal precedents, including Culhane v. Aurora Loan Services of Nebraska and Mills v. U.S. Bank National Association. Justice McDonough stated that " … [MERS] may validly serve both as the holder of 'bare legal title as mortgagee of record’ and as ‘nominee for the member-noteholder.'’" He further said that MERS did not need to be the holder of the note to be the mortgagee or hold any interest in order to have the authority to assign the title.
“Massachusetts courts are ruling consistently that MERS may validly serve as both the mortgagee of record and the nominee for MERS System member note holders,” MERSCORP Holdings Vice President for Corporate Communications Janis Smith said.
All over the country, homeowners facing foreclosure have been challenging MERS' authority to assign their mortgages and transfer titles, and courts have repeatedly ruled in MERS' favor in these cases. In the last month alone, MERS has won victories in similar lawsuits in Texas, Georgia, California, as well as in the U.S. Fifth, Tenth, and Eleventh Circuit Courts of Appeals. Earlier this year, courts in Ohio, New Hampshire, Montana, Rhode Island, Idaho, and Arkansas all confirmed that MERS did in fact possess the authority to assign mortgages.
“MERS has a valid interest in security instruments and the authority to assign that interest. This has been a consistent holding in courts in both in Georgia and across the country,” Smith said in a statement issued by MERS after the Georgia decision.