MERS Prevails Against Recording Fee Claim

Federal Judge in Texas Rejects Plaintiffs' "Remote" Claim for County Recorder Fees

CONTACT: Jason Lobo
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Reston, Virginia, October 31, 2012— MERSCORP Holdings, Inc. today announced that U.S. District Court Judge David C. Guaderrama of the Western District of Texas, El Paso Division, granted a motion to dismiss filed by Mortgage Electronic Registration Systems, Inc. (MERS) and its co-defendants in response to a wrongful foreclosure complaint and unsupported claim to alleged unpaid county recording clerk filing fees in El Paso and Ector counties.

In Huml v. MERS, Judge Guaderrama denied the plaintiffs' claim to receive monies based upon allegations "that MERS (and presumably other named defendants) failed to record subsequent transfers of interest in certain real property subject to mortgage; that failure injured the counties by depriving them of the revenues (in the form of lost revenue or uncollected recording fees) they could have earned; and therefore Plaintiffs were injured."  Judge Guaderrama rejected Plaintiffs' claims and held that "[s]uch allegations of personal injury is too remote and simply piggy-backs on the direct injury, if any, to the counties."   Additionally, Judge Guaderrama agreed with MERS' positions on all counts and empathically ordered the Clerk of the Court to "CLOSE this case."

"We are pleased that this meritless case is finally closed and that the Court found that plaintiffs lack standing to seek rewards for third-party county recorders," Janis Smith MERSCORP Holdings' vice president for Corporate
Communications said.  "Complaints with generalized and unsupported allegations are a common foreclosure delay tactic, but multiple opinions by courts in Texas have supported MERS' authority as a mortgagee under Texas law because the deeds of trust signed by borrowers at closing identify MERS as the beneficiary and the nominee for the original lender and its successors and assigns."

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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.