Editor: David Reiss
Brooklyn Law School

April 9, 2013

United States District Court of Nevada Holds that under Nevada Law, Foreclosure Proceedings can be Commenced by the Beneficiary

By Gloria Liu

In Ramos v. MERS, No. 2:08-CV-1089, 2009 WL 5651132 (D. Nev. Mar. 5, 2009), court concluded that, under Nevada law, foreclosure proceedings can be commenced by “the beneficiary, the successor in interest of the beneficiary, or the trustee” and, thus, that MERS had a right to foreclose. Since the deed of trust expressly named MERS as beneficiary, MERS had the right to commence foreclosure and to appoint the substitute trustee. In their purchase of a home, homeowners made a loan and the deed of trust on the loan with Bayporte designated MERS as the beneficiary, and authorized MERS to act as a nominee. MERS then executed a Substitution of Trustee, naming Cal-Western as the trustee under the Deed of Trust. Cal-Western issued and recorded a “Notice of Breach and Default and of Election to Cause Sale of Real Property Under Deed of Trust.” The property was sold at a trustee’s sale. Homeowners claimed that the foreclosure on their home was wrongful and alleged that the party that authorized the foreclosure was not authorized to do so, that the sale was not carried out in accordance with Nevada law, and that Nevada law authorizing non-judicial foreclosures and Defendants’ actions in accordance therewith violate Plaintiffs’ rights to procedural and substantive due process. The court dismissed this claim because they found that MERS was empowered to foreclose on the property and to appoint Cal-Western as substitute trustee for purpose of conducting the foreclosure.

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