A district court in Collin County, Texas, granted a motion for summary judgment in the favor of MERSCORP Holdings on Wednesday, according to an announcement from MERS.
The court also reinstated the MERS lien on the property, finding the lien to be "in full force and effect." MERS was seeking to reinstate a lien which it claims was improperly extinguished by defendant Kingman Holdings in the case of Mortgage Electronic Registration Systems, Inc. v. Kingman Holdings, Inc. The lien was previously extinguished by Kingman in a quiet title action. MERS contended that their due process rights under both the Texas and U.S. Constitutions were violated when Kingman did not provide MERS, as record beneficiary of the deed of trust, with notice or make MERS a party to Kingman's action that sought to extinguish the MERS lien.
Presiding Judge Scott J. Becker voided the prior judgment that went in Kingman's favor and reinstated the MERS lien, stating that the MERS deed of trust creates a "valid, subsisting, and enforceable lien" on the property, according to MERS. The judge also ruled that the MERS deed of trust is senior to any Kingman interest and he awarded MERS and MERSCORP Holdings with attorney's fees and costs associated with prosecuting the case.
"This ruling is consistent with case law in numerous states that has determined that MERS has a right to service of process."
"This judgment once again confirms that as record mortgagee or beneficiary on security instruments MERS is entitled to notice of all proceedings affecting the real property encumbered by the MERS lien," MERSCORP Holdings VP for Corporate Communications Janis Smith said. "This ruling is consistent with case law in numerous states that has determined that MERS has a right to service of process."
This is the third major court victory for MERS in the space of a month. In mid-August, the U.S. District Court for the Middle District of Tennessee Nashville Division dismissed a lawsuit that challenged MERS' role in a deed of trust in Tennessee. In early August, MERS was awarded a victory inU.S. Court of Appeals for the Third Circuit, which ruled that MERS was not duty-bound by the Pennsylvania recording statute to record all land conveyances.