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Two Federal Courts Hold MERS Entitled to Notice under California Law

MERS has Claim Pursuant to Deed of Trust

FOR IMMEDIATE RELEASE

CONTACT: Janis Smith
Phone: (703) 738-0230
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Reston, Virginia, January 24, 2017—MERSCORP Holdings, Inc. today announced that multiple courts in California concluded that Mortgage Electronic Registration Systems, Inc. (MERS) is entitled to notice under California law.

In both pdf Mortgage Elec. Registration Sys., Inc., et al v. Johnston (210 KB) , and pdf Mortgage Elec. Registration Sys. v. Robinson (191 KB) , MERS filed suit to set aside the defendants’ quiet title judgments that purported to void MERS’ deeds of trust against the properties, which were obtained in prior lawsuits. Neither defendant named MERS as a party in their actions nor provided notice of the prior lawsuits to MERS.

In Robinson, the U.S. Court of Appeals for the Ninth Circuit affirmed the trial court’s judgment that MERS had a right to notice and concluded that based upon the language in the deed of trust executed by the borrowers, “… MERS has a recorded adverse claim against the property under the deed of trust, and the Robinsons were required to name MERS as a defendant in [their] quiet title action.”

In Johnston, the United States District Court for the Central District of California held, “Here, the Deed of Trust provides that MERS ‘holds legal title’ … [therefore] the Court finds that MERS had an adverse claim against Johnston’s title which was known to Johnston when he filed the quiet title action.” Accordingly, the court declared the quiet title judgment null and void.

“We are pleased that courts have repeatedly upheld MERS’ rights as a record beneficiary, to notice of actions affecting its lien interests,” said MERSCORP Holdings Vice President for Corporate Communications, Janis Smith.

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.

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