Appeals Court Sides with MERS in Mortgage Assignment Case

Appeals Court Sides with MERS in Mortgage Assignment Case

02/22/2013 BY: TORY BARRINGER

A three-judge panel of the U.S. Court of Appeals for the Ninth Circuit has affirmed, without hearing, an order dismissing claims against Mortgage Electronic Registration Systems, Inc. (MERS), according to a release from MERSCORP  Holdings.

The appellate ruling affirmed a decision issued by District Judge David Alan Ezra of the District Court for Hawaii. The complaint against MERS was dismissed with prejudice.

According to the release, the plaintiff’s second amended complaint against MERS contained four allegations related to its assignment of a mortgage to a foreclosing lender. The ruling found that MERS, as nominee for the lender and the lender’s successors and assigns, had authority to assign the mortgage to a third party.

“[T]he Court has grave doubts about the validity of the factual predicate underlying most, if not all, of Plaintiffs’ claims,” Judge Ezra wrote. He also held that “the Ninth Circuit concluded that MERS was a legitimate organization and that the mortgage which plaintiffs signed put them on notice of the role MERS was to play in their home loans.”

“Judge Ezra could have simply dismissed these allegations when noting that the plaintiffs were not a party to the Assignment and, therefore, could not challenge its validity, but he further analyzed the merits—or lack thereof—of the complaint,” said Jason Lobo, MERSCORP Holdings’ director for corporate communications. “We are pleased that Judge Ezra found no merit to these charges and that the appellate panel agreed with his methodical rejection of these frequently used and always failing legal arguments.”

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