In MERS v Robinson, handed down Jan 28, 2014, the Central California District Court dismissed MERS (Mortgage Electronic Registration System) claims that it holds claim to the defendant’s property title instead of the Lender. The court holds MERS is a “separate corporation that is acting solely as nominee for Lender and Lender’s Successors and assigns. Benefit of collection belongs to lender, as true beneficiary. The court held that MERS must act as agent for lender, not for its own interests.
MERS v Robinson is a huge win for homeowners with underwater mortgages in California and paves the way for Quiet Title actions by individual homeowners to forestall illegal property foreclosure by agents of MERS.
According to Dave Krieger, a title consultant to counties in the US, a leading authority on challenging foreclosure and chain of title issues, and author of Clouded Titles said about MERS v Robinson:
Folks! This is the case we’ve been waiting for! Cervantes, Ashcroft, Iqbal, Bellestri, Landmark … all the great cases came back to bite MERS in the ass! MERS tried to upend a quiet title action wherein Robinson’s attorney managed to expunge the original deed of trust, which tied MERS to the equation.
Significantly, the court (who also personally wrote the Cervantes opinion) nailed the first of MERS’s 4 claims sine non qua (one condition predicates the other conditions in order for the others to be effective); thus, the other 3 conditions got shot down. MERS IS NOT AN ECONOMIC BENEFICIARY in California! MERS ALSO DOES NOT HAVE CLAIM TO TITLE! (even though it says in the DOT that MERS has only legal title, the court found it confusing because MERS is using its “false beneficiary status” to claim it also has rights to title, which the court disagreed with.
MERS has until March 3, 2014 to file an amended complaint on the 3 conditions that failed due to their beneficial status failing. Hmmm … we may not see one filed based on this ruling. If they don’t, the whole bloody thing gets dismissed WITH PREJUDICE!
How can MERS have claim to anything as a nominee? The court apparently felt that since the real party in interest didn’t answer the complaint, it’s agent didn’t need to be noticed! This is an important point to recognize! The agent did need to be noticed! This changes the landscape for quiet title actions folks!