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MERS Found Not Liable in Arkansas Suit

""""MERSCORP Holdings"""":http://www.mersinc.org was once again absolved from legal misconduct according to a release issued by the company. The Virginia-based company announced on Friday that the 8th Circuit U.S. Court of Appeals ruled on December 31, 2013 in Mayme Brown v. Mortgage Electronic Registration Systems, Inc, (MERS) affirming the U.S. District Court's dismissing all of the Clerk's claims against MERS.


The court affirmed the case in its entirety because the court found that because Arkansas does not impose any requirements to record documents, MERS did nothing wrong and it did not avoid paying recording fees for mortgage assignments. The circuit court also affirmed dismissal of the unjust enrichment claims, finding that """"without a duty to record, however, the lenders have retained nothing of value to which they are not entitled, and there is nothing they could be required to restore to the county.""""


Similar lawsuits have been filed against MERS in Minnesota, North Carolina, Rhode Island, Michigan, Oklahoma, Iowa, Florida, Arkansas, Illinois, Missouri, Massachusetts, and Kentucky.

The circuit court found that Brown's illegal-exaction claim was a class action under the Class Action Fairness Act of 2005 (CAFA) being alleged by all Arkansas taxpayers, and that as the clerk of the court, Brown was not a """"taxpayer"""" who could bring this action.

In the District Court, Judge Susan O. Hickey, in September of 2012, dismissed the class action suit filed on behalf of Hot Spring County and all of the circuit clerks in Arkansas. Citing long-standing Arkansas law, Judge Hickey held that """"Arkansas's statutes ‘do not require assignments to be recorded.' In fact, existing law is to the contrary.""""

""""This is an excellent decision for MERS, as it puts this case to rest by emphasizing that MERS' role as mortgagee and lenders' use of the MERS System is legal under Arkansas law and consistent with the purpose of the state's recording statute,"""" said Janis L. Smith, MERSCORP Holdings VP of Corporate Communications.

Hickey cited the original intent of the law is to give constructive notice to subsequent purchasers. Judge Hickey also dismissed the notion that counties are unjustly deprived of recording fees. """"Because they had no duty to record their mortgages,"""" Judge Hickey wrote, """"Defendants have not deprived [the] plaintiff or her proposed class of anything to which they are entitled.""""

About Author: Kelli Snowgren


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