Author Archives: Gloria Liu

About Gloria Liu

Gloria is a second year student at Brooklyn Law School. She graduated from Wellesley College in 2009 with a BA in International Relations and English. She has interned with The Topps Company, Inc, and just completed an externship with Brooklyn Law School's Bankruptcy clinic. She is on the Journal of Corporate, Financial and Commercial Law and wrote her journal note on Sec. 619 of the Dodd-Frank Act. She continues to be interested by Dodd-Frank and hopes to branch into financial compliance.

Multnomah County Suing MERS and Big Banks

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Multnomah County in Oregon is suing MERS and 18 other co-defendants for $38 million. The co-defendants include Bank of America, JPMorgan Chase, CitiMortgage, HSBC, Wells Fargo and Oregon banks Bank of the Cascades, Lewis and Clark Bank and West Coast Bank.

The county claims that MERS devastated the public property records system while helping clients avoid required transaction fees. The suit is based on theories of negligence, unjust enrichment and fraudulent misrepresentation.

Read article here: https://www.bizjournals.com/portland/news/2013/02/08/county-seeking-38-million-from-mers.html

 

Arkansas Supreme Court Holds that MERS is Not a Necessary Party in Foreclosure Proceedings

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In MERS, Inc. v. Southwest Homes of Arkansas, 301 S.W.3d 1 (AK S. Ct, 2009), the Supreme Court held that MERS was not a real party in interest and need not be named or served in a foreclosure action by a second mortgage holder. The case arose from a foreclosure on a mortgage granted in a one-acre lot that also had a prior deed of trust. To secure the first mortgage, the borrowers entered into a deed of trust. The lender on that deed of trust was Pulaski Mortgage, the trustee was James C. East, and the borrowers were the Lindseys. MERS was listed on the deed of trust as the “Beneficiary” acting “solely as nominee for Lender,” and “Lender’s successors and assigns.” To secure a second promissory note, the owners of the mortgage granted the mortgage to Southwest Homes. Both mortgages were recorded. Southwest later entered into foreclosure closings and did not serve MERS. The Court found that MERS was at most the mere agent of the lender Pulaski Mortgage Company, Inc., and as such it held no property interest and was not a necessary party.

Minnesota Court of Appeals holds that MERS has Standing to Foreclose By Advertisement

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repayments many people have

In In re Sina, No. A06-200, 2006 WL 2729544 (MN. Ct. App. 2006), the Court of Appeals of Minnesota held that MERS had standing to foreclose when it held legal title to a mortgage and was acting as nominee for the holder of the note. Candice Sina, the appellant, had executed a mortgage on the property in favor of Maribella.  Maribella then executed an assignment of mortgage in favor of MERS.  After Sina defaulted on her mortgage payment, MERS recorded the assignment and commenced foreclosure proceedings. Although the record showed that a secondary broker serviced the mortgage, the assignment of mortgage was recorded in MERS’s name and by agreement, MERS retained the power to foreclose the mortgage in its name. Therefore, they had standing to foreclose the property by advertisement.

Nebraska Supreme Court Holds that MERS is Not a Mortgage Broker

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In MERS, Inc. v. Nebraska Dept. of Banking & Fin, 704 N.W.2d 784 (NE S. Ct. 2005), the Supreme Court held that MERS was not a mortgage broker under the Mortgage Bankers Registration and Licensing Act. The court agreed with the district court’s characterization of the services provided by MERS. The district court stated that the “MERS system was created to facilitate the transfer of ownership interests and servicing rights in mortgage loans. Under the System, MERS serves as mortgagee of record for participating members through assignment of the members’ interests to MERS. Mortgage lenders participate in the MERS System as members upon completion of a membership application.” Even though the Supreme Court was in agreement with the above characterization it concluded that such services are not equivalent to acquiring mortgage loans, as defined by the Act.

Mortgage Electronic Registration System (MERS): A Twenty First Century Creation Navigating An Eighteenth Century Legal System

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Thomas Kilpatrick of the University of South Carolina School of Law discusses MERS and argues that MERS is emblematic of the systemic problems leading up to the 2008 housing crisis as it was forged out of the environment which ultimately led to the housing bubble. He asserts further that MERS helped sustain and strengthen the housing bubble, is a lead contributor to the ongoing foreclosure crisis, and is a primary impediment to its swift resolution.

Read article here: https://www.natlawreview.com/article/mers-twenty-first-century-creation-navigating-eighteenth-century-legal-system

Arkansas District Court Dismisses Recording Fee Case

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In Brown v. Mers, No. 11-cv-06070 (W.D. Ark., 2012), the Arkansas District Judge dismissed a recording-fee lawsuit filed against MERS and held that state laws do not require mortgage assignments to be recorded. The case had transformed into a class action suit alleging that mortgage assignments were made without the payment of transfer fees to the counties. The court believed that use of the MERS System fulfills the purpose of the recording statutes and payment is made when the mortgage when the mortgage is recorded in public land records. Moreover, Arkansas law does not provide for a duty to record mortgages. Without a duty to record mortgages, the court found that MERS did not deprive defendants of any entitlement.

Dodd-Frank Solutions to Protect Against Wrongful Foreclosures

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Christopher Seide wrote an article titled “Consumer Financial Protection Post Dodd-Frank: Solutions to Protect Consumers Against Wrongful Foreclosure Practices and Predatory Subprime Auto Lending” for the University of Puerto Rico’s Business Law Journal, summarizing the various solutions Dodd-Frank offers to the average homeowner consumer.

Of particular note is his criticism of the solutions offered in Dodd-Frank and the reasons for their inefficacy.

The article can be found here: https://www.uprblj.com/wp/wp-content/uploads/2012/06/3.2-UPRBLJ-219-Chris-Seide-DoddFrank-06-01-2012.pdf