U. S. District Court Finds Borrower Lacks Legal Standing

Northern District of Georgia Dismiss Borrower’s Challenge to Validity of MERS Assignment


CONTACT: Janis Smith
Phone: 703-738-0230
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Reston, Virginia, May 21, 2014—MERSCORP Holdings, Inc. today announced that the United States District Court of the Northern District of Georgia dismissed a challenge to the validity of a MERS assignment and granted a motion to dismiss.

In pdf Opraseuth v. HSBC Bank USA Opraseuth v. HSBC Bank USA (329 KB) , the borrowers filed a suit against defendants alleging, among other claims, that the assignment from MERS was invalid because MERS did not specify it was acting as a subsequent lender’s nominee.

In his opinion, Judge Robert L. Vining, Jr. relied on the Eleventh Circuit Court of Appeals decision in  pdf Edward v. BAC Home Loans Servicing (11th Cir. 2013) (70 KB)  and concluded that “as an initial matter, the plaintiffs lack standing to challenge the assignment in this case because they were not parties to the assignment contract.” In Edward, the appellate court held that as non-parties to the assignment, the plaintiffs in that case did not have standing to contest the validity of the transfer of the security deed.

Further, Judge Vining ruled that even if the borrowers had standing to challenge the validity of the MERS assignment, “Under the plain language of the Security Deed the plaintiffs expressly authorized MERS to assign the Security Deed" and “a contract is not invalidated simply because an agent fails to disclose the identity of its principal.”

“MERS’ role and authority are disclosed in the security instrument that is executed by the borrower at the closing, which includes that MERS has legal authority to act on behalf of the lender and the lender’s successors and assigns – including the right to execute an assignment,” 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


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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