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Rhode Island Affirms MERS Right to Assign


The Supreme Court of Rhode Island continued the recent trend nationwide of affirming the legitimacy of Mortgage Electronic Information Systems’ (MERS) role as mortgagee, including its authority to assign a mortgage.

In Ingram v. Mortgage Electronic Registration Systems, Inc. the plaintiffs maintained that the mortgage assignment to MERS was void and its subsequent assignment to Deutsche Bank was also invalid, giving the bank no right to foreclose when he subsequently defaulted on the mortgage.

The court relied on previous case law to conclude that the contract explicitly granted the power of sale to MERS and its successors and assigns and the “assignee of MERS acquired all the rights which MERS possessed and therefore possessed the right to exercise the power of sale”.

“The Court’s ruling is consistent with previous decisions upholding MERS’ role as mortgagee and validating its authority to assign mortgages it holds,” said MERSCORP Holdings Vice President for Corporate Communications, Janis Smith.

The system, which was designed to eliminate the need and administrative expense for paper assignments of various mortgage-related rights as much as possible, has been under attack in state courts. The victory is the latest in a string of challenges to the validity of foreclosure proceedings by MERS assignees across the nation.

About Author: Derek Templeton

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Derek Templeton is an attorney based in Dallas, Texas. He practices in the areas of real estate, financial services, and general corporate transactional law. His experience includes time as an Attorney Adviser for the U.S. Small Business Administration and as General Counsel for a nonprofit organization in Dallas. A self-avowed "policy junkie," he has a keen interest in the effect that evolving federal policy has on the mortgage, default servicing, and greater housing industries.

One comment

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    I have followed DS News for some years and don’t know what I would do without them. As to the MERS story, the U.S. Supreme court needs to take a look at the MERS setup, created by big banks to surpass having to pay their fair share of fee’s and have supervision and availability to change information at will. MERS has no employees. Jamie Dimon Bank of America stated that BofA stopped using MERS in 2007. Here is the flaw in the MERS system; I am not airing my personal grievance but pointing out a specific problem. I had a modification with Bank of America which was paid up”latter acknowledged by BofA” when my account was sold to JP Morgan who immediately obtained a foreclosure from MERS and processed NOD’s and foreclosure wthin eight days of acquiring my account. I have paperwork to show that not only was my modification paid to date but that I continued to make payments to their servicer who was MARIX Servicing LLC. I lost my home September 2012 and have had complaints with the CFPB who are dragging their feet.

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