Washington Courts Continue to Dismiss Wrongful Foreclosure Lawsuits against MERS Post-Bain
Reston, Virginia – May 21, 2013 – (RealEstateRama) — MERSCORP Holdings, Inc. today announced that Judge Thomas Rice of the U.S. District Court, Eastern District of Washington, recently ruled in favor of Mortgage Electronic Registration Systems, Inc. (MERS) and its co-defendant members, denying a nine-count complaint alleging wrongful foreclosure and violations of Washington’s Consumer Protection Act (CPA).
In Ukpoma v. U.S. Bank, the plaintiff, citing the Washington Supreme Court’s decision in Bain v. Metropolitan Mortgage Group, Inc., argued that a wrongful foreclosure claim exists against MERS because MERS cannot act as trust deed “beneficiary” under Washington law and therefore its assignment of the deed of trust to the foreclosing bank was void. Judge Rice found no merit to the plaintiff’s reliance on Bain in support of a wrongful foreclosure count against MERS.
“The fact that MERS is listed as a beneficiary of the deed of trust is not relevant to the outcome of this case,” Judge Rice wrote, ruling that since U.S. Bank was the holder of the plaintiff’s note and deed of trust, it had the authority to foreclose.
Judge Rice methodically rejected all other counts of the plaintiff’s complaint, including allegations of violations of Washington’s CPA. To prevail on CPA claims, a plaintiff “must also demonstrate that he or she was injured as a result of the act or practice,” he held. Judge Rice dismissed this claim, ruling that the “Plaintiff simply has not been injured by MERS’s involvement with her loan.”
“Here in Ukpoma, the plaintiff relied on the Bain decision in an attempt to stall the non-judicial foreclosure of her property after she defaulted on her loan,” MERSCORP Holdings Director of Corporate Communications Jason Lobo said. “Unconvinced, Judge Rice explained in detail why a borrower’s attempts to halt a non-judicial foreclosure using the Bain decision and claims against MERS will not be successful. We continue to emphasize that struggling borrowers are better served by working with their mortgage servicers and seeking appropriate financial counseling, than by attempting to use the judicial system to avoid valid foreclosures.”
For description 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.