August 20, 2013
Court Rules MERS is Not Required to Register With the Secretary of State Because Enforcing Deeds of Trust Does Not Qualify as “Doing Business” in California
The court in Sulak v. Mortgage Electronic Registration Systems, Inc., et al., DCA No. E039775, (2004) found that the lower court properly denied the preliminary injunction and that the orders denying the TRO were proper.
In this case, the plaintiffs-borrowers stopped making payments on their loan and initiated a suit for damages and injunctive relief against MERS. The plaintiff claimed that stoppage of payment was proper as they alleged that MERS could not enforce or collect the note and deed of trust [1] without holding a Certificate from the Secretary of State, [2] without responding to multiple requests for validation of the debt under the Fair Debt Collection Practices Act (FDCPA), and [3] without having endorsements on the note or recorded assignments to successors in interest to the original lender.
The court rejected the plaintiff’s contentions and went further to characterized the plaintiff’s approach as “[e]ssentially, plaintiffs called ‘Olly-olly oxen free’ on the note and deed of trust, and stopped making payments.”
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