MERS has Authority to Act as Mortgagee
Reston, Virginia – June 14, 2016 – (RealEstateRama) — MERSCORP Holdings, Inc. today announced that the Superior Court of Pennsylvania affirmed the trial court’s order granting summary judgment in MERS’ favor.
In pdf Marjer v. Poplawski (103 KB) ,* the appellant purchased property that was subject to a prior, unsatisfied mortgage with MERS as the mortgagee given by the prior owner. After purchasing the property, the appellant immediately filed a quiet title action alleging the deed to the property divested any claims MERS had in the property.
The trial court entered summary judgment in MERS’ favor, finding the appellant’s interest was subject to the mortgage because the appellant could not produce any evidence that the mortgage had been paid off at the time the appellant purchased the property. On appeal, the Superior Court found the trial court had failed to address the appellant’s standing arguments that MERS’ nominee interest was insufficient to give MERS standing to defend the lawsuit and remanded the matter back to the trial court to consider this issue. The trial court again affirmed the priority of MERS’ mortgage and held that MERS had standing to defend the action.
In a second appeal, the appellant again argued that MERS lacked standing to defend the lawsuit. This time, the Superior Court found the appellant’s argument that the party it named in a lawsuit lacked standing to defend the same lawsuit “peculiar” and “perplexing.” Instead, the appellant focused their argument not on the issue appealed, but on MERS’ authority to assign the underlying mortgage. Nevertheless, citing to its decision in pdf Bank of America v. Gibson (114 KB) , the Court stated that it had “expressly held that MERS, as holder of legal title to the interests granted by the mortgagor in the mortgage, clearly has authority to assign the mortgage.” Further, the Court found that the standing argument made by the appellant was “a manufactured controversy” that was “patently baseless” and, citing to the language of the mortgage, as well as its prior decision in pdf MERS v. Ralich (16 KB) , the Court found MERS’ authority under the mortgage “clearly encompasses MERS’ ability to defend its interests in this quiet title action.”
“Courts in Pennsylvania continue to emphasize prior holdings that recognize MERS’ authority to act as mortgagee under Pennsylvania law,” said MERSCORP Holdings Vice President for Corporate Communications, Janis Smith. “MERS has authority to act on behalf of the lender; this authority is granted by plain language in the mortgage document signed at closing by the borrower.”
For descriptions of cases and other materials pertaining to MERS’ business and role in U.S. housing, please visit www.mersinc.org.
* This is an unpublished memorandum.
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.
CONTACT: Janis Smith