Court Confirms Validity of MERS’ Role as Nominee and Beneficiary under Deed of Trust
Reston, Virginia – August 19, 2015 – (RealEstateRama) — MERSCORP Holdings, Inc. today announced that the United States District Court for the Middle District of Tennessee Nashville Division granted MERS’ motion and dismissed a borrower lawsuit challenging MERS’ role in a Tennessee deed of trust.
In pdf Johnson v. Broker Solutions, Inc. (140 KB), plaintiffs alleged 11 causes of action attacking the securitization of their mortgage loan and relied on a “property securitization analysis report” provided by a third party.
In his report and recommendation, U.S. Magistrate Judge John S. Bryant rejected the plaintiffs’ argument that MERS cannot be a real party in interest in a securitized mortgage. Magistrate Bryant quoted pdf Dauenhauer v. Bank N.Y. Mellon (282 KB), which held that “[c]ourts nationally, including Tennessee’s, have consistently approved MERS’ role in loans when designated as the nominee and beneficiary under a deed of trust.” Magistrate Judge Bryant held that because the plaintiffs’ deed of trust named MERS as nominee and beneficiary, “the role of MERS was valid and Plaintiffs’ claim fails as a matter of law.”
Further, Magistrate Judge Bryant identified a “flood of cases” where courts have addressed claims and “certified forensic audit” or “property securitization analysis reports” that are almost identical to the claims and report presented in the plaintiffs’ complaint. He cited the United States District Court for the Western District of Tennessee’s recent decision in pdf Renfroe v. Flagstar Bank (207 KB), which noted that Renfroe’s allegations had been copied verbatim from a generic complaint readily available online and also confirmed the validity of MERS’ role as nominee and beneficiary of a deed of trust. Judge Todd J. Campbell of the United States District Court for the Middle District of Tennessee adopted Magistrate Bryant’s report and recommendation, and he dismissed the case on August 11, 2015.
“We are pleased that the district court relied on case law that has consistently upheld MERS’ role as nominee and beneficiary under a deed of trust,” said MERSCORP Holdings Vice President for Corporate Communications, Janis Smith.
For descriptions of cases and other materials pertaining to MERS’ business model and role in U.S. housing, please visit www.mersinc.org.
MERSCORP Holdings, Inc. is a privately held corporation that owns and manages the MERS® System and all other MERS® products. It is a member-based organization made up of thousands of lenders, servicers, sub-servicers, investors and government institutions. Mortgage Electronic Registration Systems, Inc. (MERS) serves as the mortgagee in the land records for loans registered on the MERS® System, and is a nominee (or agent) for the owner of the promissory note. The MERS® System is a national electronic database that tracks changes in mortgage servicing and beneficial ownership interests in residential mortgage loans on behalf of its members.
CONTACT: Janis Smith