April 28, 2010

The appellate courts of Oregon, like many states, have not yet spoken on the numerous issues surrounding MERS, including what MERS really is (legally); what alleged authority MERS has (notwithstanding boilerplate language in Deeds of Trusts or Mortgages); what MERS can or cannot do; and whether MERS assignments are of any legal effect. For those of you following the emerging case law on these issues, you know that the Supreme Courts of Kansas and Arkansas; the U.S. Bankruptcy Courts for the Districts of Nevada and Idaho; the state courts in Missouri, Vermont, and South Carolina; and other courts which have actually dissected the MERS language in Deeds of Trusts and Mortgages have consistently said “NO” to MERS: that MERS is not  the “Beneficiary”; that MERS has no authority to transfer the promissory notes because it was never the owner thereof (as one cannot transfer what it does not own); that MERS is limited in its authority by its choice to designate itself “solely as nominee”; and that MERS thus essentially has no power to do anything. These recent court decisions are consistent in their holdings, and cite the same group of recent cases.

MERS is also limited by the very language of its contract which it has with lenders and servicers, as found by the Supreme Court of Nebraska which was cited in a decision from a state court in South Carolina. This language in MERS’ own contract provides that MERS agrees not to assert any rights to the loans or the properties mortgaged thereby. MERS’ own attorney affirmatively represented this to the Supreme Court of Nebraska when MERS was trying to get out of paying certain taxes. However, MERS then turns around in other states and tries to take the position that it has rights in a mortgage instrument and note sufficient to further a foreclosure, which is in fact the assertion of a right both as to the loan and as to the mortgaged property, which is in direct contradiction to MERS own contract provisions! Talk about speaking with a forked tongue!

Fortunately, the overwhelming majority of the recent decisions have seen through MERS’ doublespeak and inconsistent positions, and have struck down MERS’ authority to do anything other than to function as an electronic tracking entity for mortgage loans, period. Certain older decisions, where certain courts blindly accepted the MERS language in a mortgage instrument without really examining what MERS is and what MERS limited itself to, continue to be rejected or are in the minority.

FDN attorneys have two upcoming court hearings in Oregon which will be squarely addressing the MERS issue. FDN’s Jeff Barnes, Esq. has been successful in raising the problematic issues surrounding MERS and presenting the recent wealth of anti-MERS law in the states of Idaho and New Jersey in connection with defending foreclosure actions, whose state appeals courts have still not yet spoken on the issue.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com 
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