MERS Model Prevails Again in the Fifth Circuit


Federal Circuit Court Panel Rejects “Show Me the Note” Theory

Reston, Virginia – May 29, 2013 – (RealEstateRama) — MERSCORP Holdings, Inc. today announced that a three-judge panel of the United States Court of Appeals for the Fifth Circuit ruled in favor of BAC Home Loans Servicing, LP. (BAC) and Fannie Mae, affirming a lower court’s decision dismissing claims of wrongful foreclosure. The Fifth Circuit Court is a federal court with appellate jurisdiction over the district courts of Louisiana, Mississippi and Texas.

In Martins v. BAC Home Loans Servicing, LP, Judges Jerry E. Smith, Edward C. Prado and Priscilla R. Owen dismissed the plaintiff’s “show-me-the-note” theory alleging that the defendant lacked standing to foreclose because the assignment of the mortgage by MERS to BAC separated the note from the deed of trust, rendering the mortgage unenforceable and invalid.

“Numerous district courts have addressed this question, and each one to analyze Texas law has concluded that Texas recognizes assignment of mortgages through MERS and its equivalents as valid and enforceable,” Judge Smith wrote on behalf of the panel. The Court further held that Texas differentiates between enforcement of a note and foreclosure, with the latter enforcing a deed of trust, and can be accomplished without judicial supervision. Importantly, the Court noted that “the mortgage was assigned by MERS, which had been given such power, including the power to foreclose, by the deed of trust.”

“The Court of Appeals’ affirmation of the lower court’s decision is consistent with countless other decisions rejecting the ‘show-me-the-note’ theory and validating MERS’ authority to assign mortgages,” MERSCORP Holdings Director for Corporate Communications said.

For description 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

Previous articleNo Place Like Home Conference: The Past, Present and Future of The American Dream Southern California Event Focuses on the Future of Housing in California
Next articleDuke Energy selects five South Carolina properties for potential industrial development