Lawletter Vol 34, No 8, September 21, 2010
Alistair Edwards—Senior Attorney, Property Law
Mortgage Electronic Registration Services, Inc. ("MERS"), is a private database that simplifies the way mortgage ownership and servicing rights are originated, registered, sold, and tracked. Mortgage lenders and other participating entities, known as MERS members, subscribe to the MERS system and pay annual fees for the electronic registration and tracking of ownership and assignment of mortgages. Members contractually agree to appoint MERS to act as their agent on all mortgages registered in the MERS system. Issues as to standing have arisen when MERS has attempted to foreclose on a mortgage.
In MERS v. Azize, 965 So. 2d 151 (Fla. Dist. Ct. App. 2007), the Florida District Court of Appeal held that MERS had standing to foreclose on a mortgage even though it did not hold the beneficial interest in the mortgage and was only the holder, not the owner, of the note. See also MERS v. Revoredo, 955 So. 2d 33 (Fla. Dist. Ct. App. 2007) (as collection and litigation agent for owners of notes and mortgages, MERS had standing to bring foreclosure action based on note of which it was holder, even though company did not own note; no substantive rights, obligations, or defenses were affected by company's status with respect to mortgage and note). Other courts have also arrived at the same result when considering MERS's standing to foreclose. See, e.g., In re Huggins, 357 B.R. 180 (Bankr. D. Mass. 2006); In re Sina, No. A06-200, 2006 WL 2729544 (Minn. Ct. App. Sept. 26, 2006) (unpublished); MERS v. Ventura, No. CV 054003168S, 2006 WL 1230265 (Conn. Super. Ct. Apr. 20, 2006) (unpublished); MERS v. Leslie, No. CV044001051, 2005 WL 1433922 (Conn. Super. Ct. May 25, 2005) (unpublished). But cf. LaSalle Bank Nat'l Ass'n v. Lamy, 824 N.Y.S.2d 769 (Sup. Ct. 2006) (unreported table decision).