Editor: David Reiss
Brooklyn Law School

October 15, 2013

California Superior Court Upholds Language in Deed of Trust

By Gloria Liu

In Obst v. Fannie Mae, No. 171619 (Shasta Cty. Super. Ct. July 11, 2011), the court denied the homeowner’s claim and upheld the language in the Deed of Trust. The original lender was Mortgageit, Inc. with MERS listed as the beneficiary in the deed of trust. The Deed of Trust states that MERS was authorized to exercise any or all of the lender’s interests with respect to the property.  The Deed of Trust was then assigned to One West Bank and recorded. Homeowner contends that the assignment is void because there is no proof that that the party acting as authorized signatory was an authorized signatory of MERS.

The deed of trust stated:  “Borrower understands and agrees that MERS holds only legal title to the interests granted by Borrower in this Security Instrument, but, if necessary to comply with law or custom, MERS (as nominee for Lender and Lender’s successors and assigns) has the right: to exercise any or all of those interests, including but not limited to, the right to foreclose and sell the Property…” Relying on a similar case, the court concluded that the deed of trust granted MERS the authority to initiate a foreclosure and contains no suggestion that the lender or its successors and assigns must provide further assurances that MERS is authorized to proceed with a foreclosure at the time it is initiated. Therefore, the court dismissed the complaints.

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