MERS Wins in U.S. District Court for the District of New Hampshire

Court Dismissed Wrongful Foreclosure Lawsuit


CONTACT: Janis Smith
Phone: 703-738-0230
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Reston, Virginia, May 14, 2014—MERSCORP Holdings, Inc. today announced that the United States District Court of New Hampshire granted MERS’ motion to dismiss a wrongful foreclosure lawsuit.

In pdf Lovy v. Fed. Nat’l Mortgage Ass’n (138 KB) , the Plaintiffs filed an action seeking damages for wrongful foreclosure and to quiet title premised on the alleged invalidity of an assignment executed by MERS, in addition to other claimed violations of state and federal consumer laws.

United States District Judge Steven J. McAuliffe noted that the United States Court of Appeals for the First Circuit had recently discussed MERS’ role in the national mortgage market in some detail in Culhane v. Aurora Loan Servs., 708 F.3d 282 (1st Cir. 2013), and had “unequivocally ruled that MERS may validly possess and assign a legal interest in a mortgage.” See pdf Serra v. Quantum Servicing Corp. (48 KB) , No. 13-1557 (1st Cir. Mar. 31, 2014). “Consequently,” he said, “plaintiffs’ assertions to the contrary are without legal merit.” The Court noted that more recently factually similar claims had been found legally deficient by the First Circuit in pdf Butler v. Deutsche Bank Trust Co. (55 KB) , No. 12-2108 (1st Cir. Apr. 4, 2014).

In light of these holdings, the Court analyzed Plaintiffs’ claims finding them insufficient to give rise to a plausible claim against MERS and concluding that the defendants had the legal right to exercise the power of sale provision of the mortgage. In dismissing Plaintiffs’ slander of title claims, the Court reasoned “MERS was entitled to record Plaintiffs’ Mortgage deed under New Hampshire law and had no other practical means of securing … the loan.” Therefore, the mortgage did not create a cloud on Plaintiff’s title.

“Although the First Circuit cases cited by the Court dealt with Massachusetts properties, the District Court of New Hampshire nonetheless adopted their holdings as consistent with New Hampshire law, and struck Plaintiffs’ wrongful foreclosure and slander of title claims,” said MERSCORP Holdings Vice President for Corporate Communications, Janis Smith. “This court, as others have consistently done before it, held that MERS has legal authority to act on behalf of the lender.”

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


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.


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