MERS Announces Two Victories in Texas

A Texas judge granted a motion to dismiss a case filed against ""Mortgage Electronic Registration Systems, Inc."":http://www.mersinc.org/ (MERS), and its co-defendants over county recording clerk filing fees.

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Plaintiffs in El Paso and Ector counties took MERS to court based upon allegations ""that MERS (and presumably other named defendants) failed to record subsequent transfers of interest in certain real property subject to mortgage; that failure injured the counties by depriving them of the revenues (in the form of lost revenue or uncollected recording fees) they could have earned; and therefore Plaintiffs were injured.""

U.S. District Court Judge David C. Guaderrama rejected those claims, holding that ""[s]uch allegations of personal [COLUMN_BREAK]

injury is too remote and simply piggy-backs on the direct injury, if any, to the counties."" Guaderrama dismissed the case without prejudice and ordered for it to be closed.

""We are pleased that this meritless case is finally closed and that the Court found that plaintiffs lack standing to seek rewards for third-party county recorders,"" said Janis Smith, VP for corporate communications at MERSCORP Holdings, Inc. ""Complaints with generalized and unsupported allegations are a common foreclosure delay tactic, but multiple opinions by courts in Texas have supported MERS' authority as a mortgagee under Texas law because the deeds of trust signed by borrowers at closing identify MERS as the beneficiary and the nominee for the original lender and its successors and assigns.""

The dismissal was MERS' second victory of the week in Texas. One day earlier, MERSCORP announced that the Supreme Court of Texas denied a borrower's petition for review. In her complaint, the borrower alleged that a non-judicial foreclosure by lender MidFirst Bank was invalid because at the time the foreclosure notices were sent, MERS had not yet assigned to MidFirst its interest as the beneficiary of the deed of trust.

In denying review, the court upheld an opinion from the Court of Appeals that ""the date of the assignment from MERS to MidFirst is not evidence of the actual date that MidFirst became entitled to authorize enforcement of the lender's rights in the deed of trust.""