August 20, 2010
MERS is in the spotlight again in view of the recent article in Yes! magazine and the Huffington Post. As those of you who follow the case law and this website know, the overwhelming majority of courts throughout the United States have seen through MERS’ doublespeak in mortgages and Deeds of Trust and have held it to its self-declared status of a nominee only with no ownership interest in the notes and no authority to transfer either the mortgages or notes as it is not and was never a “beneficiary”, especially in view of the admissions of MERS’ own attorneys in the Landmark (Kansas) decision and the MERS contract language where it agrees not to assert any rights to either the loans or properties mortgaged thereby.
Unfortunately, however, some courts still cling hopelessly to an “agency” theory: that the borrower appointed MERS as its agent and that “the debt follows the mortgage”. If these courts really read the law, they would see that they have it backwards and that the “agency” theory cannot make MERS something it is not. The Vermont decision surgically dissected the MERS anomaly and set the record straight.
The note is the obligation. The mortgage or Deed of Trust secures repayment of the note, and you cannot sue solely on a mortgage instrument. It is a collateral security instrument which has no enforcement power absent a concomitant debt (the Note). As such, in order to transfer the instrument securing repayment of the obligation, you need to own the obligation. This law is so clear on this point that it is a wonder that some courts have gone out of their way to either ignore it or pervert it.
Thankfully, the trend continues to be that MERS is nothing more than an entity to electronically track mortgages and that it is not a “beneficiary”, “agent”, “mortgagee”, etc. We hope that courts who will be addressing the MERS issues will follow the law and hold MERS to what itself chose to be: “solely a nominee”.
Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com