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Nebraska District Court Grants Motion for Summary Judgment in MERS’ Favor

Case re-affirms state law supports MERS as beneficiary of Deed of Trust

FOR IMMEDIATE RELEASE

CONTACT: Janis Smith
Phone: 703-738-0230
Email: This email address is being protected from spambots. You need JavaScript enabled to view it.

Reston, Virginia, May 24, 2017—MERSCORP Holdings, Inc. today announced that the District Court of Lancaster County, Nebraska granted summary judgment in Mortgage Electronic Registration Systems, Inc. (MERS’) favor supporting MERS’ role as beneficiary.

In   pdf Schroeder v. Bank of America, N.A. (973 KB) , the Plaintiff alleged that MERS could not serve as beneficiary in Nebraska deeds of trust, and could not assign a valid security interest. The Plaintiff sought to quiet title, a declaration as to the interests in the property and an injunction prohibiting foreclosure.

In his order, Judge Kevin R. McManaman found that not only is MERS entitled to summary judgment because the plaintiff does not have standing to challenge the assignment of the deed of trust, but also entitled to such ruling based on the lack of merit to the plaintiff’s claims. The Judge ruled that the deed of trust was a contract the plaintiff agreed to and “[t]he freedom to contract allows the parties to contract for MERS to serve as beneficiary, as nominee for the lender and the lender’s successors and assigns.” Citing to numerous cases, Judge McManaman noted that challenges similar to those raised by the plaintiff had been rejected by courts across the country.

Further, Judge McManaman stated that the MERS assignment was “proper and valid” and held that the rights under the deed of trust were “freely assignable unless the deed of trust contract prohibits assignment. Here, the Deed of Trust does not prohibit assignment; to the contrary, the Deed of Trust provides it may be assigned.”

“We are pleased the court recognized that under Nebraska law MERS may serve as the beneficiary under deeds of trust and that its assignments are valid,” 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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