Tag Archives: non-judicial foreclosure

Illinois Federal Appellate Court Rules That MERS Had Sufficient Authority to Commence Foreclosure Proceeding in its Capacity as an Agent

Posted on by

The federal appellate court in MERS v. Estrella, 390 F.3d 522 [7th Cir. 2004] ruled that MERS had a sufficient authority to commence a foreclosure proceeding, in its capacity as an agent on behalf of its principal.

https://absoluterentals.com/absolutegov/

At issue in this case was an application to confirm a sale. On appeal, the court dismissed the appeal based upon well-established law that Court orders denying confirmation to judicial sales are not final decisions, and thus are not appealable.

Additionally, implicit in the court’s holding was recognition that MERS has standing to commence a foreclosure proceeding as agent on behalf of its principal. Indeed, the Estrella Court did not dismiss the proceeding in its entirety for lack of standing by the agent, rather cited to Indiana Gas Co. v. Home Insurance Co., 141 F.3d 314, 319 [7th Cir. 1998] which recognized the capacity of an agent to commence a proceeding “[w]hen the principal’s interests are affected by the litigation, the principal’s citizenship counts even if the agent is the sole litigant.”

The federal appellate court did not issue a blanket ban to suits commenced by MERS as an agent on behalf of its principals. Instead, in suits brought by agents, it directs federal district courts to ascertain the citizenship of the principal of the plaintiff to determine whether federal diversity jurisdiction exists.

Georgia Court Authoritatively Recognizes MERS’ Right to Foreclose

Posted on by

The court in American Equity Mortgage, Inc. and Mortgage Electronic Registration Systems, Inc. v. Chattahoochee National Bank, # 05-cv-1951 (Forsyth Cty. Sup. Ct., Dec. 29. 2005) authoritatively recognized the right of MERS to foreclose. This case involved an action to enjoin an immediate judicial sale due to equitable subrogation in which the court recognized the validity of a lien held by MERS and MERS’ ability to enforce it.

After considering arguments and an evidentiary hearing, the court concluded that “MERS, in its capacity as grantee in the deed to secure debt and as nominee for American, or its successor in interest as the holder of the note, is the entity that would suffer irreparable harm if [Chatahoochee] foreclosed on its judgment lien and is the entity entitled to seek an injunction in this case. MERS is entitled to enforce the American Deed to Secure Debt per its terms.”

The court awarded MERS a permanent injunction precluding Chatahoochee or its successors or assigns from selling or foreclosing on the property as long as the deed held by MERS remained in effect.

Arkansas Court Holds That MERS Had Standing to Seek Relief for its Writ of Assistance

Posted on by

The court in Mortgage Electronic Registration Systems, Inc. v. Stephanie Gabler, et al., (Circuit Court of Garland County # 2004-17-II) held that “MERS has standing to seek relief for its Writ of Assistance and is the proper party to foreclose the mortgage as MERS is the mortgagee of record and holder of the promissory note.”

The borrowers claimed that MERS did not own the note, thus they did not have standing. However, the court reasoned that ownership of the note was not required to have standing.

The court held that MERS had standing. MERS subsequently obtained a foreclosure judgment, held the foreclosure sale, and obtained a post-judgment order for writ of assistance to remove the occupants, including the named defendant [Gabler.] Shortly after the writ was obtained in June 2004, the pro se borrowers sought removal to federal court, and the Western District of Arkansas rejected jurisdiction. A subsequent emergency appeal to the 8th Circuit Court of Appeals was also denied. The borrowers then filed for bankruptcy, but voluntarily dismissed the bankruptcy action four months later.

The borrowers then went back to state court in the eviction action and filed an objection to the writ of assistance, a request for injunction, and a counterclaim. The borrowers claimed in their objection that they were not properly served in the foreclosure proceedings and that MERS does not have standing because it is not the owner of the note.

The court rejected all of the contentions made by the borrowers and ordered that MERS may execute its writ with the assistance of the county Sheriff.

Oregon Court Stops Foreclosure Pending Clarification in State Court as to MERS Stating Borrower Has “Likelihood of Success Against MERS…”

Posted on by

The court in Rinegard-Guirma v. Bank of America, et al., Civil Case No. 10-1065-PK, (2010) enjoined the defendants [Bank of America, et al.] from foreclosing on the plaintiff’s [Rinegard-Guirma] property.

The plaintiff, Natache D. Rinegard-Guirma, filed a Motion for a temporary restraining order and preliminary injunction seeking to enjoin a foreclosure sale of her residence. The court granted the plaintiff’s motion for preliminary injunction and continued to enjoin the foreclosure of her property until the claim regarding MERS was resolved by the state court.

Florida Court Dismisses Class Action to Declare MERS in Violation of Florida Consumer Protection Laws

Posted on by

The debtors in Trent v. MERS, 288 Fed. App’x 571 (11th Cir. 2008) argued that Mortgage Systems sent them deceptive notices that were in violation of section 559.72(9) of the Collection Act. The debtors further argued that the notice misidentified Mortgage Systems as their “creditor.” Lastly, the debtors alleged that the lower court should have applied the “least-sophisticated-debtor” standard to determine whether these notices were misleading.

The debtors also argued that MERS violated the Collection Act when it filed foreclosure actions against them, but the court rejected this argument. The court reasoned that even if MERS engaged in “debt collection activities” under the Collection Act, MERS did not violate section 559.72(9), because MERS had the authority to file foreclosure actions.

Ultimately the court decided that the debtors’ arguments failed. The court found that under the mortgage contracts, MERS had the legal right to foreclose on the debtors’ property. Mortgage Systems was the mortgagee, the notices sent to the debtors restated information from the mortgage contracts and were not likely to mislead even the least sophisticated debtor.

Arizona Court Holds That MERS is the Beneficiary With the Authority to Foreclose

Posted on by

The court in Ciardi v. The Lending Company, Inc. et al., 2010 WL 2079735 (D. Ariz. 2010) held that that MERS is the beneficiary with the authority to foreclose. In doing so the court granted the defendant’s motion to dismiss and motion to vacate temporary restraining order.

In December 2005, plaintiff [Bianca Ciardi] borrowed $270,500 from ‘The Lending Company’ for the purpose of purchasing real property. Plaintiff also executed a promissory note and a deed of trust. Soon after, the plaintiff’s note was sold.

Plaintiff eventually defaulted on their note and their home was nearing auction in a non-judicial trustee’s sale. A lower court granted the plaintiff’s temporary restraining order (“TRO”) without notice. Defendants removed to this court, and sought to have the TRO dissolved and Plaintiffs’ first amended complaint dismissed pursuant to FRCP 12(b)(6).

In their analysis, the court noted, that the Plaintiff’s amended complaint was not the model of clarity and that the plaintiff did not allege any specific causes of action, rather much of their amended complaint was simply a narrative concerning the mortgage securitization industry.

In reaching their conclusion, the court, reviewed the plaintiff’s amended complaint. And concluded that even considering the plaintiff’s pro se status and, in so doing, construing plaintiff’s amended complaint liberally, the court found that the plaintiff failed to state a claim upon which relief may be based. Plaintiff also sought a preliminary injunction to halt the planned foreclosure of their home. However, the court reasoned, in order to obtain preliminary injunctive relief, the moving party must show a likelihood of success on the merits.

Accordingly, because the court found the plaintiff’s amended complaint failed for a failure to state a claim, the court found that the plaintiff failed in showing a likelihood of success on the merits. As such, the Court denied the plaintiff’s request for a preliminary injunction.

MERS’ Assignments are Recognized as Valid as New York Appellate Court Overturns ‘N.Y. v. Alderazi’ & ‘LaSalle v. Lamy’

Posted on by

In the case of Bank of New York v. Eddie Sachar, et al., 95 A.D.3d 695 (2012), the court found the Bank of New York Mellon had standing to foreclose based on a MERS assignment and the delivery of the note.

The court’s ruling granted the plaintiff’s [Bank of New York Mellon] motion for summary judgment on its complaint against defendant [Sachar]. The plaintiff-bank proved its standing to commence the foreclosure action by demonstrating that it was both the holder or assignee of the subject mortgage and the holder or assignee of the underlying note at the time the action was commenced.

Although the defendant correctly alleged that, although Mortgage Electronic Registration System [MERS] validly assigned the mortgage to plaintiff, and the assignment was properly recorded in the public records, MERS had not been given any interest in the underlying note by the lender (see Bank of N.Y. v Silverberg, 86 AD3d 274, 283 [2011]).

However, the complaint and the documents annexed to plaintiff’s motion establish that an assignment of the note had been effectuated by physical delivery of the note before the current action was commenced.