Federal Court in Washington Dismisses Complaint Against MERS

The U.S. District Court for the Western District of Washington dismissed a three-count complaint against ""MERSCORP Holdings, Inc."":http://www.mersinc.org (MERS) that alleged wrongful foreclosure and violations of the state's Deed of Trust Act (DTA) and Consumer Protection Act (CPA).

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In the case _Zalac v. CTX Mortgage Corp._, the plaintiff was never foreclosed on, and so the wrongful foreclosure claim was dismissed since an element of the claim was missing: a foreclosure sale.

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""Washington does not recognize a claim for wrongful initiation of foreclosure proceedings. Thus, Plaintiff's claim fails as a matter of law and is dismissed,"" Chief Judge Marsha J. Pechman wrote.

Pechman also dismissed the claim accusing MERS of violating the DTA, noting ""under Washington law a foreclosure sale is a prerequisite to any DTA claim.""

As for the allegation concerning the violation of the CPA, Judge Pechman wrote, ""Plaintiff's position lacks merit because it is a misapplication of the Washington State Supreme Court's decision in Bain v. Metropolitan Mortg. Group, Inc.""

""The Court in Bain only held that characterizing MERS as the beneficiary on a deed of trust has the capacity to deceive homeowners, but held that MERS involvement does not by itself constitute a per se violation of the CPA,"" Pechman explained.

Pechman also said the plaintiff did not show how he was deceived by MERS.

""Plaintiff does not allege any specific unfair or deceptive act by MERS...Instead, Plaintiff routinely received written notification regarding which entity was servicing his loan and had no communication with MERS. Plaintiff fails to make the specific allegation that he was deceived by the characterization of MERS as a beneficiary on the Deed of Trust,"" she wrote.