MERS continues racking up wins
Mortgage Electronic Registration Systems, Inc. (MERS) was once seen as the pariah of the housing sector, blamed as one of the many causes of the economy’s demise, but has no racked up dozens of significant wins wherein judges are dismissing cases against them and affirming their authority in the chain of title.
Today, Rhode Island Superior Court Associate Justice, Allen Rubine rejected another claim of wrongful foreclosure against MERS and their co-defendants in the case of Akalarian v. RBMG, Inc., et al, wherein the borrower alleged that MERS had no authority to assign the mortgage and that because the loan belonged to IndyMac, therefore the foreclosure should be nullified.
Justice Rubine wrote in his ruling, “This issue has been conclusively resolved by the recent Rhode Island Supreme Court decision in Bucci v. Lehman Bros. Bank, FSB wherein the Court affirmed MERS’ authority to act as a mortgagee and as nominee of the lender pursuant to a mortgage contract and to exercise the statutory power of sale granted to MERS under that contract.”
Rhode Island is not alone
Additionally, he cited the Rhode Island Supreme Court’s adoption of the First Circuit’s reasoning in Culhane v. Aurora supported his finding that “a mortgagee executing a mortgage assignment need not be explicitly acting as an agent of the noteholder in order to transfer its bare legal interest in the mortgage …”
“With the Superior Court’s consistent rulings on this issue, and the Rhode Island Supreme Court’s decision in Bucci, the questions regarding MERS’ role in mortgage loan transactions has been consistently upheld,” said Janis L. Smith, MERSCORP Holdings Vice President of Corporate Communications. “The law in Rhode Island is clear.”
MERS was initially established by Fannie Mae and Freddie Mac just over 15 years ago in conjunction with several major banks as a means to expedite the loan recording process as it used to be done through individual county clerk offices which was slow. “The founders went ahead even though no state laws authorized them to bypass the required filing with clerks,” according to Reuters. That said, several states have ruled that MERS did have proper authority to act as part of the chain of title.