Massachusetts District Court Applies Well-Settled Law Affirming MERS’ Role

MERS’ Role Does not Improperly Bifurcate Mortgage and Note, and MERS Assignments are Valid under Massachusetts Law

Reston, Virginia, September 23, 2016 – (RealEstateRama) — MERSCORP Holdings, Inc. today announced that Judge Mark L. Wolf of the U.S. District Court for the District of Massachusetts adopted and incorporated Magistrate Judge Donald L. Cabell’s Report and Recommendation, which granted summary judgment to defendants and applied the well-settled law of the First Circuit and the Massachusetts Land Court in affirming Mortgage Electronic Registration Systems, Inc.’s (MERS) role in mortgages in the state.

In pdf Carver v. The Bank of New York Mellon (1.56 MB) , the plaintiffs argued that the foreclosure of their mortgage loan was invalid because the note and mortgage were improperly bifurcated at origination when the lender held the promissory note and MERS held the lien. Further, they argued that the MERS assignment was invalid and incapable of passing a valid interest in the mortgage.

Quoting the pdf Culhane (115 KB) decision from the U.S. Court of Appeals for the First Circuit, Magistrate Judge Cabell held that “[s]plitting a note and mortgage does not violate state law because the note and the mortgage are instruments which ‘exist on separate planes’ and need not be held by the same entity.” The magistrate judge went on to hold that assignments by MERS are valid under Massachusetts law. According to the well-settled case law of Massachusetts state and federal courts, MERS’ legal interest in each mortgage that it holds gives it authority to assign the mortgage regardless of whether it also holds the promissory note. See: Culhane; pdf Abate (515 KB) .

“We are pleased that the District Court again recognized well-settled Massachusetts law that MERS’ role does not improperly split the mortgage from the note, and MERS’ assignments of a mortgage are valid,” said MERSCORP Holdings Vice President for Corporate Communications, Janis Smith. “This is another victory for MERS, and we are pleased that the District Court ruling is consistent with court rulings on similar claims.”

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

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MERSCORP Holdings, Inc. is a privately held corporation that owns and manages the MERS® System and all other MERS® products. Users of the MERS® System include 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
Phone: 703-738-0230
Email: janiss (at) mersinc (dot) org