In bankruptcy proceedings in Las Vegas Mortgage Electronic Recording Systems, Inc. (“MERS”) sought to have a stay of foreclosure lifted. MERS had filed numerous motions to lift the stay. These motions were opposed by the counsel for the debtor. The claim by the debtors counsel was that MERS had no standing in the matter.
MERS Inc. is an organization created to track and monitor the whereabouts of mortgages and who has the beneficial interests. It is reportedly tracking some 60 million loans. It was created by the lenders for the purposes of controlling the paperwork and bureaucratic nightmare that the mortgages had become. It reportedly has saved the lenders over a $Billion dollars in costs. (More on this later.) MERS Claims that it has the rights as an owner, and those rights include the right to foreclose.
The judge, however ruled that since MERS would not receive the benefits in the event of a foreclosure, it is not really the owner and consequently has no standing. It is merely a straw man. The motions were denied and the stay was not lifted.
The lift-stay motions in Dart and Hawkins are denied. MERS may not enforce the notes as the alleged beneficiary. While MERS may have standing to prosecute the motion in the name of its Member as a nominee, there is no evidence that the named nominee is entitled to enforce the note or that MERS is the agent of the note’s holder. Indeed, the evidence is to the contrary, the note has been sold, and the named nominee no longer has any interest in the note.
IT IS SO ORDERED.
A similar ruling was handed down by the Kansas Supreme Court August 28, 2009.
The relief for homeowners and problems for the banking industry remains to be seen.