MERS’ Role in Rhode Island Affirmed by State Supreme Court


Justices: MERS has both Contractual and Statutory Authority to Support its Role as Mortgagee

Reston, Virginia – April 12, 2013 – (RealEstateRama) — MERSCORP Holdings, Inc. today announced that a five-justice panel of the Rhode Island Supreme Court held that Mortgage Electronic Registration Systems, Inc. (MERS), being named as the mortgagee as the agent of the promissory note-owner of the mortgage, is consistent with Rhode Island law.

In Bucci v. Lehman Brothers Bank, FSB et al., Justice Francis X. Flaherty, writing for the Court, agreed with the trial justice’s reasoning surrounding MERS role as the mortgagee, which held that “the fact that MERS acts in a nominee capacity for the lender and the lender’s successors and assigns does not diminish MERS’s role as the mortgagee nor is there created a new legal term ‘nominee-mortgagee.’”

In reviewing the language contained in the mortgage, the Court found the language to be “clear and unequivocal” when defining MERS as the mortgagee and agreed with the trial justice’s reasoning by finding that “the plaintiffs explicitly granted the statutory power of sale and the right to foreclose to MERS,” and therefore that MERS had the “contractual authority to exercise that right.” Supreme Court Justices Maureen McKenna Goldberg, Gilbert V. Indeglia, William P. Robinson III and Chief Justice Paul A. Suttell joined in this unanimous opinion.

The justices ruled that none of the plaintiff’s myriad arguments held any merit. “[I]t is our opinion that none of the statutes that plaintiffs rely upon prohibit MERS from foreclosing on the Bucci mortgage…” they held. The justices recognized that in the “modern world of lending” it is no longer the case that the mortgagee and the note-holder are always the same entity. Further, the Court found nothing in the statutes, “despite the feudal roots of these enactments” to “preclude an entity like MERS from acting as the nominee on behalf of the note-owner.”

The court concluded that “… we see no reason why MERS, as an agent of the owner of the note, cannot foreclose on behalf of that entity.” MERS stopped foreclosing in its name in July 2011. Mortgages are now assigned to a member lender prior to initiating foreclosure proceedings.

“We are pleased that the Rhode Island Supreme Court Justices expended such thoughtful and precise analysis when affirming MERS role and authority,” MERSCORP’s Director for Corporate Communications Jason Lobo said. “This decision caps months of strong rulings in MERS’ favor in Rhode Island.”

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.

Jason Lobo
Phone: 703.652.1660

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