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Rhode Island Affirms MERS Right to Assign

The Supreme Court of Rhode Island continued the recent trend nationwide of affirming the legitimacy of Mortgage Electronic Information Systems’ (MERS) role as mortgagee, including its authority to assign a mortgage.

In Ingram v. Mortgage Electronic Registration Systems, Inc. the plaintiffs maintained that the mortgage assignment to MERS was void and its subsequent assignment to Deutsche Bank was also invalid, giving the bank no right to foreclose when he subsequently defaulted on the mortgage.

The court relied on previous case law to conclude that the contract explicitly granted the power of sale to MERS and its successors and assigns and the “assignee of MERS acquired all the rights which MERS possessed and therefore possessed the right to exercise the power of sale”.

“The Court’s ruling is consistent with previous decisions upholding MERS’ role as mortgagee and validating its authority to assign mortgages it holds,” said MERSCORP Holdings Vice President for Corporate Communications, Janis Smith.

The system, which was designed to eliminate the need and administrative expense for paper assignments of various mortgage-related rights as much as possible, has been under attack in state courts. The victory is the latest in a string of challenges to the validity of foreclosure proceedings by MERS assignees across the nation.

About Author: Derek Templeton

Derek Templeton is an attorney based in Dallas, Texas. He practices in the areas of real estate, financial services, and general corporate transactional law. His experience includes time as an Attorney Adviser for the U.S. Small Business Administration and as General Counsel for a nonprofit organization in Dallas. A self-avowed "policy junkie," he has a keen interest in the effect that evolving federal policy has on the mortgage, default servicing, and greater housing industries.
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