March 20, 2012
A federal appellate court recently rejected the theory that the securitization of a mortgage renders the holder of the underlying trust deed and its nominees unable to foreclose absent authorization from every investor holding an interest in the securitized mortgage. The Tenth Circuit Court of Appeals, in the case of Scarborough v. LaSalle Bank, noted that the Utah Court of Appeals has rejected the theory as an incorrect legal assertion.
Also, in two cases decided on February 24th, the Nevada Supreme Court decided that based on the record before it, nothing suggested that the district court clearly erred in concluding that the MERS assignment was valid. In Volkes v. BAC Home Loans and Davis v. US Bank, the Nevada Supreme Court rejected appellants’ contention that the assignment was invalid solely by virtue of its connection to MERS. The Court noted that courts in Nevada and across the nation have repeatedly recognized that MERS serves at least some legitimate business purpose.
California courts have ruled that MERS can foreclosure as a nominee (Gomes v. Countrywide Home Loans) and that MERS, as a nominee of the lender, can assign the note and deed of trust (Ferguson v. Avelo Mortgage, LLC).