Editor: David Reiss
Brooklyn Law School

November 26, 2013

Texas Court Finds That MERS Had Authority to Assign, Thus Defendant Could Enforce Note

By Ebube Okoli

The plaintiff in Hines v. Wells Fargo Bank, N.A., 2013 U.S. Dist. LEXIS 153895 (S.D. Tex. Oct. 28, 2013), contended that defendants could not show an unbroken chain of title to enforce the note because MERS had no authority to assign the note to Deutsche Bank. However, the court eventually dismissed the plaintiff’s claims with prejudice.

The plaintiff sought a declaration from the court that any foreclosure of her home would be wrongful because none of the defendants had standing to foreclose. The plaintiff claimed that this was due to defects in the assignment and securitization process.

The plaintiff’s wrongful foreclosure allegations could be grouped into two categories: (1) MERS lacked authority to assign the deed and note from First NLC to Deutsche Bank; and (2) defendants did not comply with the securitization requirements of the applicable Pooling and Servicing Agreement (“PSA”). However, the court found that under recent Fifth Circuit case law, both of the plaintiff’s grounds for her claims failed. Thus, the court decided that her wrongful foreclosure claim must be dismissed.

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