Fifth Circuit Rules MERS’ Mortgage Assignment Valid


Reston, Virginia – November 1, 2013 – (RealEstateRama) — MERSCORP Holdings, Inc. today reported that a three-judge panel of the United States Court of Appeals for the Fifth Circuit last month ruled in favor of MERSCORP Holdings, Inc.  and its co-defendants, affirming a lower court’s decision dismissing the plaintiff’s claims of wrongful foreclosure.  The Fifth Circuit is a federal court with appellate jurisdiction over the district courts of Louisiana, Mississippi and Texas.

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In Kramer v. Fannie Mae, Judges E. Grady Jolly, Harold R. Demoss, Jr. and Leslie H. Southwick rejected the plaintiff’s claims challenging MERS’ authority to assign the deed of trust and that Bank of America, as an assignee of MERS, lacked the power to foreclose because it allegedly did not hold both the deed of trust and the underlying note.

“The terms of the deed of trust are clear in granting MERS the power to assign its rights,” the court wrote. “MERS assigned its right to foreclose to Bank of America and Bank of America exercised that right.” Citing Martins, the court further held that “the Texas Property Code allows a party who has been assigned the deed of trust by MERS to foreclose, regardless of whether that party also holds the underlying note.”

“It should be no surprise that the Court of Appeals affirmed the lower court’s decision,” said MERSCORP Holdings Vice President for Corporate Communications, Janis Smith. “As this panel has made clear, MERS has legal authority to act on behalf of the lender – including the right to execute the assignment or foreclose – and this authority is granted by plain language in the mortgage document signed at closing by the borrower.

For descriptions of cases and other materials pertaining to MERS’ business model and role in U.S. housing, please visit


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.

Janis Smith
Phone: 703-738-0230

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