Anyone who is a regular reader of this website knows that I have penned a couple of articles about Mortgage Electronic Registration Systems, Inc. (MERS). Here is a link to a previous article-UPDATE: Wyoming Court Rules In Favor of MERS. Some have called MERs a massive scam. Here is a quote from Foreclosure Defense
So can anyone guess the name of “organization” that was formed by Countrywide’s, Anthony Mozillo and Fannie Mae’s, James Johnson ten years ago it start with an M? No not the Mafia. It’s Mortgage Electronic Registration Systems Inc. commonly referred to as MERS. Yes that’s right Countrywide and Fannie Mae were the lead organizers of MERS and are shareholders and “members” of MERS. Here are excerpts from an investigative report on MERS I have been working on for the last several months. This may help shed some much needed light on MERS and the cozy relationships many of its so-called ‘members” have between each other and with our congress. It may also explain why no one in congress has bothered to investigate MERS and it crazy “paperless” system that these greedy mortgage executives invented so they could line their pockets by originating and flipping phony mortgage loans into so-called mortgage backed security trusts and then selling trillions of dollars of bonds to investors around the world. By reporting false profits from these sales Fannie Mae’s and Countrywide’s executives were able to make hundreds of millions of dollars in “bonuses”.
Here is good article explaining MERs from Business Insider.
The spokeswoman from MERs, Karmela Lejarde, who is quoted below, sent me the two latest court rulings, which ruled in favor of the company. Below are the court rulings from Oregon and California (it will be very interesting how this whole story plays out. In fact, I think MERs might become a well known name soon (for better or for worse)):
California Judge Dismisses False Claims Suit Against MERS
Court rules plaintiff is not original source of information
Reston, Virginia, March 28, 2011—The U.S. District Court of the Eastern District of California dismissed with prejudice a False Claims Act (qui tam) suit against Mortgage Electronic Registration Systems, Inc. (MERS).
In Bates v. MERS, Judge Garland E. Burrell, Jr. held that the court did not have subject matter jurisdiction because the plaintiff, Barrett R. Bates, was not an “original source” of disclosure of information as required under the California False Claims Act. In his March 11 decision, Judge Burrell stated that Mr. Bates was not a “catalyst” that led to any public disclosure because the MERS system was well-known to the public for years. In his complaint, Mr. Bates claimed to have worked in the secondary mortgage market business and, during the course of his work in June 2009, became of aware of what he alleged were false statements made by MERS, primarily the identification of MERS as the beneficiary in the deeds of trust.
Numerous California court decisions have decided that MERS is a beneficiary of the deed of trust including, most recently in February 2011, the California Court of Appeals (Fourth District) in Gomes v. Countrywide Home Loans, et al., and the United States Federal District Court (Northern District of California) in Sanchez v. U.S. Bank, N.A.
“This ruling represents to us that lawsuits alleging baseless attacks on MERS will not be tolerated in the court system any longer,” said MERS spokesperson Karmela Lejarde. “We have proven over and over again in courts around the country that MERS can be a mortgagee. We are very transparent in what we do and will continue to defend ourselves against other meritless lawsuits brought by Mr. Bates in other states.”
To download a copy of the ruling, please click here.
Oregon Court Finds MERS Is Proper Beneficiary
Judge affirms that MERS is beneficiary of deed of trust
Reston, Virginia, March 29, 2011—The U.S. District Court for the District of Oregon ruled last week in favor of SunTrust Mortgage, finding that Mortgage Electronic Registration Systems, Inc. (MERS) is a proper beneficiary on the deed of trust and that the MERS assignment to SunTrust was valid.
In his ruling in Bertrand v. SunTrust et al., Judge Robert E. Jones wrote that when the borrowers signed the deed of trust, they had allowed MERS to hold legal title to the deed of trust at that time.
“[The] Plaintiff’s central premise, that MERS lacked authority to act as beneficiary or assign its beneficial interest to SunTrust is not supported by the facts or the law,” Judge Jones wrote. His ruling, based on the developing case law in the Oregon Federal Court and other jurisdictions, stated that MERS is a beneficiary and has the authority to assign its interest. The judge also noted that courts in several jurisdictions, specifically in California, Texas, Arizona and Washington, have held that regardless of whether MERS is an economic beneficiary, the language in the deed of trust grants MERS the power to initiate a foreclosure and to assign its beneficial interest.
“The ruling continues to add to the many judicial decisions affirming MERS’ role in the mortgage,” said MERS spokesperson Karmela Lejarde. “The court has acknowledged MERS’ powers to act on behalf of a lender in Oregon.”
A copy of the ruling can be downloaded by clicking here.