Editor: David Reiss
Brooklyn Law School

February 21, 2013

Superior Court of New Hampshire Denies Homeowners’ Consumer Protection Claims, Finds MERS has Authority to Assign Mortgage

By Joseph Kelly

In Powers v. Aurora Loan Services, 2011 WL 4428713, the Superior Court of New Hampshire denied plaintiff/homeowners’ petition for injunctive relief and lifted the stay on foreclosure.

Plaintiffs had sued Aurora for numerous violations of the New Hampshire Consumer Protection Act, including deceptive debt collection (RSA 358-C); fraud, and negligence. Plaintiffs had originally executed a note secured by a mortgage with GreenPoint Mortgage Funding, Inc. (“Greenpoint”). The mortgage named MERS as nominee and mortgagee. Approximately one year after signing, Aurora became the servicer of the loan. Two years later plaintiffs defaulted. Aurora had previously worked out three previous forbearance agreements with the homeowners, however after plaintiffs defaulted on the third modification Aurora instituted a foreclosure proceeding.

Plaintiffs’ only legal challenge was that Aurora lacked standing because MERS, as nominee, lacked the authority to assign the mortgage to Aurora. The court, citing Black’s Law Dictionary and other decisions nationwide, disagreed. The court summarized, “[t]he Powers (homeowners) knew who their mortgagee was; they communicated with the mortgagee and entered into a number of repayment and forbearance agreements.” The court also rejected their claims that the complex nature of the mortgage’s ownership obfuscated the current mortgagee.

The court also addressed MERS ability to assign its interest in the mortgage as it related to Aurora’s standing. Acknowledging “there is no New Hampshire case law on point” the court discussed developments nationwide and concluded MERS had the authority to transfer the mortgage to Aurora. In addition, the court referred to the language in the mortgage itself, which reflected MERS’ authority to assign its interest. Accordingly, the court dismissed plaintiffs’ claims for injunctive relief and lifted the stay on foreclosure.

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