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Third Circuit Court Rules in MERS’ Favor in Pennsylvania County Recording Case

gavel-twoThe U.S. Court of Appeals for the Third Circuit on Monday ruled in the favor of MERSCORP Holdings that the company was not duty-bound by the Pennsylvania recording statute to record all land conveyances, according to an announcement from MERS.

The Third Circuit Court's ruling reversed an earlier decision from the United States District Court for the Eastern District of Pennsylvania in the case of Montgomery County v. MERS. The county recorder was seeking to recover millions of dollars in unpaid recording fees, claiming that MERS System members violated Pennsylvania state recording laws by failing to record the transfer of promissory notes as mortgage assignments.

"This is a significant ruling for the mortgage finance industry in the Commonwealth of Pennsylvania. MERS has always maintained that no Pennsylvania law, including the recording statute imposes a duty to record the transfer of a promissory note," MERSCORP Holdings VP for Corporate Communications Janis Smith said. "We are pleased the Court of Appeals for the Third Circuit finds the county recorder’s arguments to have ‘no merit.'"

The Third Circuit Court noted in its ruling that their decision to rule in MERS' favor in this case is in accord with opinions issued by other courts in similar cases, namely the courts in the Fifth, Seventh, and Eighth Circuits.

"Because we conclude that Pennsylvania’s §351 imposes no duty to record all land conveyances, we will reverse the July 1, 2014 order of the District Court which granted the Recorder’s request for a declaratory judgment and denied the MERS entities’ motion for summary judgment," the Third Circuit Court wrote in its decision.

Also in its ruling, the Third Circuit Court denied the request by Montgomery County by certify questions to the Pennsylvania Supreme Court. The Court stated that "the answer to the issue of state law that decides this case … is so clear that we would be abdicating our responsibilities by punting."

Visit MERS' website by clicking here for information on other cases or other materials pertaining to MERS' business model and the company's role in the U.S. housing market.

About Author: Brian Honea

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Brian Honea's writing and editing career spans nearly two decades across many forms of media. He served as sports editor for two suburban newspaper chains in the DFW area and has freelanced for such publications as the Yahoo! Contributor Network, Dallas Home Improvement magazine, and the Dallas Morning News. He has written four non-fiction sports books, the latest of which, The Life of Coach Chuck Curtis, was published by the TCU Press in December 2014. A lifelong Texan, Brian received his master's degree from Amberton University in Garland.

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