Housing News

Yet another court rules MERS had authority to foreclose

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MERS has been the target of many homeowners claiming MERS’ role in their foreclosure was invalid, but judges are more frequently ruling against plaintiffs and overturning cases in appeals courts. The tide continues to turn in favor of MERS.

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MERS still being sued for role in foreclosures

MERSCORP Holdings, Inc. today announced that Judge Thomas Rice of the U.S. District Court, Eastern District of Washington, has ruled in favor of Mortgage Electronic Registration Systems, Inc. (MERS) and its co-defendant members, denying a nine-count complaint alleging wrongful foreclosure and violations of Washington’s Consumer Protection Act (CPA).

MERS has been sued numerous times, with plaintiffs commonly citing the Washington Supreme Court’s decision in Bain v. Metropolitan Mortgage Group, Inc. wherein a judge ruled a beneficiary cannot foreclose on a property under Washington state law, and regardless of what cases are cited, MERS continues to argue in court the legitimacy of its role in foreclosures as plaintiffs continue to come forward saying their foreclosures should be voided.

Judge Rice found no merit to the plaintiff’s reliance on Bain in support of a wrongful foreclosure count against MERS, in his opinion writing, “The fact that MERS is listed as a beneficiary of the deed of trust is not relevant to the outcome of this case,” noting that as U.S. Bank was the holder of the note and deed of trust, it had the authority to foreclose.

The plaintiff also alleged violations of Washington’s Consumer Protection Act (CPA), but that count was also rejected, as consumers must demonstrate injury as a result of the act, to which Judge Rice said, the “Plaintiff simply has not been injured by MERS’s involvement with her loan.”

The crux of the case

“Here in Ukpoma, the plaintiff relied on the Bain decision in an attempt to stall the non-judicial foreclosure of her property after she defaulted on her loan,” MERSCORP Holdings Director of Corporate Communications Jason Lobo said.

“Unconvinced, Judge Rice explained in detail why a borrower’s attempts to halt a non-judicial foreclosure using the Bain decision and claims against MERS will not be successful,” Lobo added. “We continue to emphasize that struggling borrowers are better served by working with their mortgage servicers and seeking appropriate financial counseling, than by attempting to use the judicial system to avoid valid foreclosures.”

After being sued by counties and homeowners alike, MERS is coming out on top more frequently, but the issue remains contentious as some believe MERS played a role in the mortgage collapse while others point to cases like this, opining they are a stunt to avoid foreclosure.

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