Editor: David Reiss
Brooklyn Law School

February 9, 2013

Utah District Court Holds that MERS has Authority to Assign Beneficial Interest

By Justin Rothman

In Fowler v. ReconTrust Company, N.A., No. 2:10 CV 01143, 2011 WL 839863 (D. Utah March 10, 2011), the United States District Court of Utah held that Plaintiffs had no viable claim for quiet title because the trust deed executed by the plaintiffs was a valid encumbrance against their title. In the trust deed, MERS was named as “Beneficiary as nominee for Lender and its successors and assigns.” MERS later assigned beneficial interest of the trust deed to BAC Home Loans Servicing, LP (BAC). ReconTrust was subsequently appointed successor Trustee by BAC. The plaintiffs’ claimed that the trust deed was not valid, and this claim rested on the allegation that MERS lacked authority to assign beneficial interest under the trust deed.


The court, however, pointed out that past decisions “affirmed MERS’[s] power to act as the beneficiary of the Trust Deed as Lender’s nominee under Trust Deeds identical to this one.” Those cases found that MERS is able to take any actions required of the lender, including the ability to pursue foreclosure proceedings and assign beneficial interest. Thus, MERS’s assignment of beneficial interest to BAC, and BAC’s subsequent appointment of ReconTrust as the successor trustee, was valid. So, the trust deed is a legitimate encumbrance on Plaintiffs’ title.

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