Magazine article American Banker

Court Upholds Use of MERS

Magazine article American Banker

Court Upholds Use of MERS

Article excerpt

Byline: Austin Kilgore

A county court in New York ruled in favor of Bank of New York Mellon Corp.'s right to foreclose after a delinquent borrower challenged Merscorp Inc.'s role in the foreclosure process.

Judge Lucindo Suarez of the Supreme Court of New York for Bronx County wrote that the mortgage agreement signed by the borrower, Eddie Sachar of the Bronx, "conferred broad powers upon MERS as nominee to act on the original lender's behalf."

The judge ruled that Bank of New York Mellon sufficiently proved its standing as rightful owner of both the mortgage and promissory note, despite the use of Merscorp's Mortgage Electronic Registration Systems to track ownership changes of the promissory note, which Bank of New York Mellon successfully proved was physically in its possession at the time the foreclosure was initiated.

"Defendant offers no other proof that the mortgage and note were not properly assigned," the ruling added.

Contrary to common use of the term, the Supreme Court that issued the March 3 ruling is not New York's highest court, but rather a county-level trial court akin to district and circuit courts in other jurisdictions.

The case could be appealed to an intermediary appellate court or the state's highest adjudicator, the New York State Court of Appeals.

But the local court's ruling could also be ammunition for any future attempts by MERS advocates to challenge a recent federal judge's ruling that MERS, which is operated out of Reston, Va. …

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