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California Federal Court Holds in MERS’ Favor

MERS, as Beneficiary, is Entitled to Notice 

FOR IMMEDIATE RELEASE

CONTACT: Janis Smith
Phone: 703-738-0230
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Reston, Virginia, March 20, 2015—MERSCORP Holdings, Inc. today announced the Central District of California federal court held that as the named beneficiary under a recorded deed of trust, Mortgage Electronic Registration Systems, Inc. (MERS) has a statutory right to notice.

In pdf Mortgage Electronic Registration Systems, Inc., et al. v. Daniel Robinson, et al. (100 KB) , MERS filed suit to vacate a quiet title judgment obtained by the defendant in a separate state court action that purportedly extinguished the deed of trust identifying MERS as beneficiary. The defendants obtained their state court judgment without providing notice of the lawsuit to MERS. Instead of serving notice to MERS, the defendants served notice on the original lender identified in the deed of trust. In the present suit, MERS argued the defendants’ lack of notice to MERS violated notice requirements of the California Code, as well as due process protections under the United States and California Constitutions.

In its opinion, the Court held, “California law requires a quiet title plaintiff to name as defendants those persons ‘having adverse claims to the title of the plaintiff against which a determination is sought.’” As such, “[d]efendants were required to name MERS as a defendant in the quiet title action []” since the deed of trust was recorded against their property at the time they filed their state court suit.

“We are pleased that the Court upheld MERS’s rights, as a recorded beneficiary, to notice of actions affecting its lien interest,” 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. 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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