Supreme Court finally ruled on MERS

 Washington Supreme Court finally ruled on Thursday that the Mortgage Electronic Registration Systems, Inc. (MERS) can't foreclose on any properties through the state's non-judicial process unless they hold the promissory note.

In the court opinion, Justice Tom Chambers wrote, "Simply put, if MERS does not hold the note, so it is not a lawful beneficiary."

Since the company is not recognized as a beneficiary without the promissory note, MERS could not, in the two cases the court examined, appoint trustees to initiate non-judicial foreclosures.

The opinion stated that only the "actual holder of the promissory note or other instrument evidencing the obligation" could act as a beneficiary and appoint a trustee to foreclose on a property.

The two plaintiffs named in the cases were foreclosed on by trustees appointed by MERS.

The Mortgage Electronic Recording System was created back in the 1990's as a way to record and track the transfer of mortgages electronically. The ease of the system allowed those who bought and sold mortgage-backed securities to avoid the cost of recording fees and the inconvenience going to a county court to record ownership.

Aside from tracking ownership, MERS in certain states was also named as a beneficiary of the deeds of trust.

In its statement, MERS said it had ceased commencing foreclosures in its name over a year ago, so this opinion does not impact its current operations. The opinion will, however, create confusion for Washington homeowners while the trial courts consider its effect on pending cases. We remain confident that MERS' role in the U.S. housing finance system is valid and will withstand legal challenges.

 What a bombshell! This is something that could have ramifications around the country. MERS understands that they don't have the right to foreclose on homeowners, and that is why they are not foreclosing on any new ones.

Now lets see if any one actually prosecutes them for this.  There has been so much fraud in foreclosure cases, no wonder the housing market has been struggling to find its feet!

Paul Antonelli
That Short Sale Guy
LaRosa Realty
Celebration, FL