Oregon Court Supports Non-judicial Foreclosures in Ruling

Oregon Court Supports Non-judicial Foreclosures in Ruling


The Oregon Supreme Court ruled Thursday that Mortgage Electronic Registration Systems, Inc. can commit certain actions on behalf of a lender when granted the authority to do so. The landmark ruling also allows for non-judicial foreclosures in the state.

The court released these decisions in its final rulings in Niday v GMAC Mortgage, LLC and Brandrup v Recontrust Company, N.A.

The court said in Niday v GMAC Mortgage, LLC, “if it can be shown that the original lenders and their successors conferred sufficient authority on MERS, to act on their behalves in the necessary respects, MERS may have the authority, as the true beneficiary’s agent to hold and transfer interests in the trust deed.”

“We are confident that we have and can prove such authority,” MERS said in response to the ruling in a statement on its website.

MERS has been the subject of many similar lawsuits across the country over the past few years.

An appeals court ruled against MERS in July in Niday v GMAC Mortgage, LLC. After the decision, lenders began sending foreclosures through the courts “to avoid possible legal challenges,” according to OregonLive.

Thursday’s decision reverses the appeals court’s decision and allows lenders to confidently pursue non-judicial foreclosures in the state without recording every assignment of the trust deed as a result of a change in loan ownership.

In a joint statement, the Oregon Mortgage Bankers Association, the Oregon Bankers Association, and several other industry groups said, Thursday, “We are pleased with many of the conclusions reached in the Court’s opinions.”

The groups expressed their support for “the non-judicial foreclosure process that has served Oregon well for more than 50 years, thereby minimizing unnecessary costs and burdens placed on Oregon’s courts and those facing foreclosure.”

“We view today’s opinions from the Oregon State Supreme Court as consistent with Mortgage Electronic Registration Systems, Inc.‘s (MERS) role and authority to act on behalf of lenders in Oregon,” MERS said in its statement.

“Ultimately this is a winning decision for the banks,” Kelly Harpster, an Oregon attorney told OregonLive.

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