Arkansas Supreme Court Denies MERS Legal Standing

Thank you Deontos
I always thought TWO for the price of ONE was a GOOD thing.
Everybody’s talking about the Kansas Appellate Decision?
What about this one from Arkansas’s Supreme Court?
Same issues, MERS and “black letter law” ….
MERS **Lost** and the Arkansas Supreme Court
cited the Landmark v KESLER Kansas Decision.



No. 08-1299


2009 Ark. LEXIS 121

March 19, 2009, Opinion Delivered



SUBSEQUENT HISTORY: Rehearing denied by Mortgage Elec. Registration Sys. v. Southwest Homes of Ark., Inc., 2009 Ark. LEXIS 458 (Ark., Apr. 23, 2009)




COUNSEL: George Nicholas Arnold – Counsel for the Appellant.

Howard Keith Morrison – Counsel for the Appellant.

Thomas D. Stockland – Counsel for the Appellee.




JIM HANNAH, Chief Justice

Mortgage Electronic Registration System, Inc. (”MERS”) appeals a decision of the Benton County Circuit Court denying its motion to set aside a decree of foreclosure and to dismiss the foreclosure action. 1 MERS alleges that the circuit court erred in ordering foreclosure because as the holder of legal title it was a necessary party that was never served. We affirm the circuit court and hold that under the recorded deed of trust in this case, James C. East, as trustee under the deed of trust, held legal title. Because MERS was at most the mere agent of the lender Pulaski Mortgage Company, Inc., it held no property interest and was not a necessary party. As this case presents an issue of first impression, our jurisdiction is pursuant to Arkansas Supreme Court Rule 1-2(b)(1).

1 Mortgage Electronic Registration System, Inc.’s (”MERS”) motion was [*2] entitled Motion to Set Aside Default Judgment; however, the circuit court found, and the parties agree, that MERS was never served. Because MERS was never served, it could not have failed to respond to that service and suffer a default judgment. The relief sought was that the decree of foreclosure be set aside and the foreclosure action be dismissed.

This case arises from foreclosure on a 2006 mortgage granted in a one-acre lot. A prior deed of trust also encumbered the property. In 2003, Jason Paul Lindsey and Julie Ann Lindsey entered into a deed of trust on a one-acre lot in Benton County to secure a promissory note. The lender on that deed of trust was Pulaski Mortgage, the trustee was James C. East, and the borrowers were the Lindseys. MERS was listed on the deed of trust as the “Beneficiary” acting “solely as nominee for Lender,” and “Lender’s successors and assigns.” The second page of the deed of trust states that “the Borrower understands and agrees that MERS holds only legal title to the interests granted by the Borrower and further that MERS as nominee of the Lender has the right to exercise all rights of the Lender including foreclosure.” The deed of trust was recorded.

In [*3] 2006, the Lindseys granted the subject mortgage on the same property to Southwest Homes of Arkansas, Inc. to secure a second promissory note. This mortgage was recorded. On February 9, 2007, Southwest Homes filed a Petition for Foreclosure in Rem against the Lindseys under the 2006 mortgage. The Lindseys, the Benton County Tax Collector, and “Mortgage Electronic Registration System, Inc. (Pulaski Mortgage Company)” were listed as respondents. Pulaski Mortgage was served; however, MERS was never served. Pulaski Mortgage did not file an answer. 2 A Decree of Foreclosure in Rem was entered on April 4, 2007, and the property was auctioned to Southwest. An Order Approving and Confirming Commissioner’s Sale was entered on May 8, 2007. In February 2008, MERS learned of the foreclosure and moved for relief, arguing it was a necessary party to the foreclosure action. The circuit court denied the motion, and this appeal followed.

2 Pulaski Mortgage was the lender of record. No assignment of the deed of trust was recorded nor had Pulaski Mortgage’s security interest been satisfied of record.

MERS asserts that it held legal title to the property and, therefore, it was a necessary party to any action [*4] regarding title to the property. The deed of trust indicates that MERS holds legal title and is the beneficiary, as well as the nominee of the lender. It further purports by contractual agreement with the borrower to grant MERS the power to “exercise any and all rights” of the lender, including the right of foreclosure. However the deed of trust provides that all payments are to be made to the lender, that the lender makes decisions on late payments, and that all rights to foreclosure are held by the lender.

No payments on the underlying debt were ever made to MERS. MERS did not service the loan in any way. It did not oversee payments, delinquency of payments, or administration of the loan in any way. Instead, MERS asserts to be a corporation providing electronic tracking of ownership interests in residential real property security instruments. See In re MERSCORP, Inc. v. Romaine, 8 N.Y.3d 90, 861 N.E.2d 81, 828 N.Y.S.2d 266 (2006). According to MERS, it was developed by the “real estate finance industry” and was designed to facilitate the sale and resale of instruments in “the secondary mortgage market, which include one of the government sponsored entities.”

MERS contracts with lenders to track security [*5] instruments in return for an annual fee. MERSCORP, supra. Those who contract with MERS are referred to by MERS as “MERS members.” According to MERS, MERS members contractually agree to appoint MERS as their common agent for all security instruments registered with MERS. 3 MERS asserts that it holds the authority to exercise the rights of the lender, and for that purpose, it holds bare legal title. Thus, it is alleged that a principal-agent relationship existed between MERS and Pulaski Mortgage under the contract terms of the deed of trust. 4

3 The Kansas Court of Appeals, in Lankmark National Bank v. Kesler, 40 Kan. App. 2d 325, 192 P.3d 177 (2008), likewise found that Mortgage Electronic Registration System, Inc. acts as an agent. We note the analysis in this case is consistent with our own but also note that the Kansas Supreme Court granted review of the Landmark case.

4 MERS is listed as a nominee on the deed of trust. A nominee is “a person designated to act on behalf of another, usu. in a very limited way.” Black’s Law Dictionary 1076 (8th ed. 2004). A nominee is also a “person who holds bare legal title for the benefit of others or who receives and distributes funds for the benefit [*6] of others.” Id. As discussed above, MERS was not designated to act on behalf of another under the facts of this case. Further, it held no title in this case where title vested in the trustee, and finally, it received and distributed no funds for the benefit of others.

“An agent is a person who, by agreement with another called the principal, acts for the principal and is subject to his control.” Taylor v. Gill, 326 Ark. 1040, 1044, 934 S.W.2d 919, 922 (1996) (quoting AMI 3d 701 (1989)). Thus, MERS, by the terms of the deed of trust, and its own stated purposes, was the lender’s agent, including not only Pulaski Mortgage but also any successors and assigns.

MERS asserts authority to act, arguing that once it becomes the agent on a security instrument, it remains so for every MERS member lender who acquires ownership. This authority is alleged to arise from the contractual relationship between MERS and MERS members. Thus, MERS argues it may act to preserve the rights of the lender regardless of who the lender may be under the MERS electronic registration. We specifically reject the notion that MERS may act on its own, independent of the direction of the specific lender who holds the repayment [*7] interest in the security instrument at the time MERS purports to act. “[A]n agent is authorized to do, and to do only, what it is reasonable for him to infer that the principal desires him to do in the light of the principal’s manifestation and the facts as he knows or should know them at the time he acts.” Hot Stuff, Inc. v. Kinko’s Graphic Corp., 50 Ark. App. 56, 59, 901 S.W.2d 854, 856 (1995) (citing Restatement (Second) of Agency
§ 33 (1958)). Nothing in the record shows that MERS had authority to act. Here, Pulaski Mortgage was the lender and MERS’s principal. Pulaski Mortgage was a named party in the foreclosure action. Thus, MERS was not acting as the lender’s agent at the time it moved to set aside the decree of foreclosure.

However, MERS also argues that it holds a property interest through holding legal title. Specifically, it purports to hold legal title with respect to the rights conveyed by the borrower to the lender. We disagree.

“A deed of trust is ‘a deed conveying title to real property to a trustee as security until the grantor repays a loan.’” First United Bank v. Phase II, Edgewater Addition, 347 Ark. 879, 894, 69 S.W.3d 33, 44 (2001)(quoting Black’s Law Dictionary [*8] 773 (7th ed. 1999)); see also House v. Long, 244 Ark. 718, 426 S.W.2d 814 (1968). The encumbrance created by the deed of trust may be described as a lien. See, e.g., First Amer. Nat’l Bank of Nashville v. Booth, 270 Ark. 702, 606 S.W. 2d 70 (1980).

Under a deed of trust, the borrower conveys legal title in the property by a deed of trust to the trustee. Phase II, supra. “In this state, the naked legal title to real property included in a mortgage passes to the mortgagee, or to the trustee in a deed of trust, to make the security available for the payment of the debt.” Harris v. Collins, 202 Ark. 445, 447, 150 S.W.2d 749, 750 (1941). The trustee is limited in use of the title to passing title back to the grantor/borrower in the case of payment, or to the lender in the event of foreclosure. See Forman v. Holloway, 122 Ark. 341,183 S.W. 763 (1916). The lender holds the indebtedness and is the beneficiary of the deed of trust. House, supra. A trustee under a deed of trust is not a true trustee. Heritage Oaks Partners v. First Amer. Title, Ins. Co., 155 Cal. App. 4th 339, 66 Cal. Rptr.3d 510 (Cal. Ct. App. 2007). Under a deed of trust, the trustee’s duties are limited to (1) upon default undertaking foreclosure [*9] and (2)
upon satisfaction of the debt to reconvey the deed of trust. Id.

In the present case, all the required parties to a deed of trust under Arkansas law are present, the borrower in the Lindseys, the Lender in Pulaski Mortgage, and the trustee in James C. East. Under a deed of trust in Arkansas, title is conveyed to the trustee. Harris, supra. MERS is not the trustee. Here, the deed of trust renamed James C. East as the trustee. The deed of trust did not convey title to MERS. Further, MERS is not the beneficiary, even though it is so designated in the deed of trust. Pulaski Mortgage, as the lender on the deed of trust, was the beneficiary. It receives the payments on the debt.

The cases cited by MERS only confirm that MERS could not obtain legal title under the deed of trust. MERS relies on Hannah v. Carrington, 18 Ark. 85 (1856); however, that case stands for the proposition that a deed of trust vests legal tide in the trustee. We are also cited to Shinn v. Kitchens, 208 Ark. 321, 326, 186 S.W.2d 168, 171 (1945), where this court stated that “[t]he trustee named in the deeds of trust was a necessary party at the institution of the foreclosure suit, as also, of course, was Kitchens, [*10] the holder of the indebtedness.” East, as trustee, was a necessary party. MERS was not. Finally, we are cited to Beloate v. New England Securities Co., 165 Ark. 571, 575,265 S.W. 83 (1924), where this court stated that the real owner of the debt, as well as the trustee in the mortgage, are necessary parties in the action to recover the debt and foreclose the mortgage. Again, this case supports the conclusion that East was a necessary party and MERS was not.

Further, under Arkansas foreclosure law, a deed of trust is defined as “a deed conveying real property in trust to secure the performance of an obligation of the grantor or any other person named in the deed to a beneficiary and conferring upon the trustee a power of sale for breach of an obligation of the grantor contained in the deed of trust.” Ark. Code Ann. § 18-50-101(2) (Repl. 2003). Thus, under the statutes, and under the common law noted above, a deed of trust grants to the trustee the powers MERS purports to hold. Those powers were held by East as trustee. Those powers were not conveyed to MERS.

MERS holds no authority to act as an agent and holds no property interest in the mortgaged land. It is not a necessary party. In [*11] this dispute over foreclosure on the subject real property under the mortgage and the deed of trust, complete relief may be granted whether or not MERS is a party. MERS has no interest to protect. It simply was not a necessary party. See Ark. R. Civ. P. 19(a). MERS’s role in this transaction casts no light on the contractual issues on appeal in this case. See, e.g., Wilmans v. Sears, Roebuck & Co., 355 Ark. 668, 144 S.W.3d 245 (2004).

Finally, we note that Arkansas is a recording state. Notice of transactions in real property is provided by recording. See Ark. Code Ann. § 14-15-404 (Supp. 2007). Southwest is entitled to rely upon what is filed of record. In the present case, MERS was at best the agent of the lender. The only recorded document provides notice that Pulaski Mortgage is the lender and, therefore, MERS’s principal. MERS asserts Pulaski Mortgage is not its principal. Yet no other lender recorded its interest as an assignee of Pulaski Mortgage. Permitting an agent such as MERS purports to be to step in and act without a recorded lender directing its action would wreak havoc on notice in this state.






PAUL E. DANIELSON, Associate Justice

I concur that the circuit court’s order should be affirmed, but write solely because I view the decisive issue to be whether MERS was, pursuant to Arkansas Rule of Civil Procedure 19(a) (2008), a necessary party to the foreclosure action. It can generally be said that “[n]ecessary parties to a foreclosure action are parties whose interest are inseparable such that a court would be unable to determine the rights of one party without affecting the rights of another.” 59A C.J.S. Mortgages § 708 (2008). See also 55 Am. Jur. 2d Mortgages § 647 (2008) (”[A]ll persons who are beneficially interested, either in the estate mortgaged or the demand secured, are proper or necessary parties to a suit to foreclose.”). Moreover, “[p]ersons having no interest are neither necessary nor proper parties, and the mere fact that they were parties to transactions out of which the mortgage arose does not give them such an interest as to make them necessary parties to an action to foreclose
the mortgage.” Id. Indeed, our rules of civil procedure contemplate the same.

Rule 19(a) of the Arkansas Rules of Civil Procedure speaks to necessary parties:

(a) Persons to Be [*13] Joined if Feasible. A person who is subject to service of process shall be joined as a party in the action if (1) in his absence complete relief cannot be accorded among those already parties, or, (2) he claims an interest relating to the subject of the action and is so situated that the disposition of the action in his absence may (i) as a practical matter, impair or impede his ability to protect that interest, or, (ii) leave any of the persons already parties subject to a substantial risk of incurring double, multiple or otherwise inconsistent obligations by reason of his claimed interest. If he has not been joined, the court shall order that he be made a party. If he should join as a plaintiff, but refuses to do so, he may be made a defendant; or, in a proper case, an involuntary plaintiff.

Ark. R. Civ. P. 19(a) (2008).

Here, a review of the deed of trust for the subject property reveals four parties to the deed: (1) Jason Paul Lindsey and Julie Ann Lindsey, “Borrower”; (2) James C. East, “Trustee”; (3) MERS, “(solely as nominee for Lender, as hereinafter defined, and Lender’s successors and assigns)”; and (4) Pulaski Mortgage Company, “Lender.” The question, then, is whether MERS, [*14] as nominee, was a necessary party that had an interest “so situated that the disposition of the action in [its] absence may” have impaired its ability to protect its interest or left a subsequent purchaser or other subject to a substantial risk by reason of its interest. The answer is no; MERS, as nominee, was not a necessary party to the foreclosure action, because it held no such interest.

Initially, I must note that my review of the deed’s notice provision reveals that the deed clearly contemplated the Lender as the party with interest, in that it provided:

13. Notices. . . . Any notice to Lender shall be given by first class mail to Lender’s address stated herein or any address Lender designates by notice to Borrower. Any notice provided for in this Security’ Instrument shall be deemed to have been given to Borrower or Lender when given as in this paragraph.

Here, as stated in the circuit court’s order of foreclosure. Pulaski Mortgage, as Lender, was served with notice of the foreclosure action, in accord with paragraph thirteen.

But, in addition, MERS claims that because it holds legal title, it has an interest so as to render it a necessary party pursuant to Rule 19(a). Indeed, pursuant [*15] to the deed of trust, MERS held “only legal title to the interests granted” by the Lindseys,

but, if necessary to comply with law or custom, MERS, (as nominee for Lender and Lender’s successors and assigns) has the right to exercise any and all of those interests, including, but not limited to, the right to foreclose and sell the Property; and to take any action required of Lender including, but not limited to, releasing and canceling this Security Instrument.

“Legal title” is defined as “[a] title that evidences apparent ownership but does not necessarily signify full and complete title or a beneficial interest.” Black’s Law Dictionary 1523 (8th ed. 2004) (emphasis added). Thus, as evidenced by the definition, holding legal title alone in no way demonstrates the interest required by Rule 19(a).

MERS further claims that its status as nominee is evidence of its interest in the property, making it a necessary party. However, merely serving as nominee was recently held by one court to be insufficient to demonstrate an interest rising to the level to be a necessary party. In Landmark National Bank v. Kesler, 40 Kan. App. 2d 325, 192 P.3d 177 (2008), review granted, (Feb. 11, 2009). MERS also [*16] asserted that it was a necessary party to the foreclosure suit at issue. There, the district court found that MERS was not a necessary party, and the appellate court affirmed. Just as here, MERS was a party to the mortgage “solely as nominee for Lender.” 40 Kan. App. 2d at 327, 192 P.3d at 179. Based on that status, the Kansas court found that MERS was in essence, an agent for the lender, as its right to act to enforce the mortgage was strictly limited. See id.

Agreeing with MERS that a foreclosure judgment could be set aside for failure to join a “contingently necessary party,” the Kansas court observed that a party was “contingently necessary” under K.S.A. 60-219 if “the party claims an interest in the property at issue and the party is so situated that resolution of the lawsuit without that party may ‘as a practical matter substantially impair or impede [its] ability to protect that interest.’” Id. at 328, 192 P.3d at 180 (quoting K.S.A. 60-219). Notably, the language of K.S.A. 60-219 quoted by the Kansas court is practically identical to the language of Ark. R. Civ. P. 19(a).

The Kansas appellate court noted that MERS received no funds and that the mortgage required the borrower [*17] to pay his monthly payments to the lender. See id. It also observed, just as in the case at hand, that the notice provisions of the mortgage “did not list MERS as an entity to contact upon default or foreclosure.” Id. at 330, 192 P.3d at 181. After declaring that MERS did not have a “sort of substantial rights and interests” that had been found in a prior decision and noting that “a party with no beneficial interest is outside the realm of necessary parties,” the Kansas court concluded that “the failure to name and serve MERS as a defendant in a foreclosure action in which the lender of record has been served” was not such a fatal defect that the foreclosure judgment should be set aside. Id. at 331, 192 P.3d at 181-82.

It is my opinion that the same holds true in the instant case. Here, Pulaski Mortgage, the lender for whom MERS served as nominee, was served in the foreclosure action. But, further, neither MERS’s holding of legal title, nor its status as nominee, demonstrates any interest that would have rendered it a necessary party pursuant to Ark. R. Civ. P. 19(a). For these reasons, I concur that the circuit court’s order should be affirmed.

IMBER and WILLS, JJ., join.

42 Responses

  1. When is your next seminar and how much is it?

  2. URGENT: MERS sighting in Kansas. Please click on link for revealing photo:

    Steve Vondran, Esq.
    Arizona Foreclosure and Bankruptcy
    Phone (877) 276-5084

  3. just bring forward the land patent in your name and be done with all this BS.there are free docs on the web

  4. I am a paralegal working with a couple who are suing Chase Bank for predatory lending and violations of Truth in Lending and mortgage fraud. This couple has been paying their payments faithfully and are not in any way in foreclosure. The original lender promised them that they could refinance their loan; and then the original lender sold the note and mortgage after closing their loan. Chase, who ended up with the note as the servicing lender, refuses to refinance their property in Kansas City, Kansas because of (A) the type of property the couple owns is “not the type of property Chase wishes to finance” and (B) Chase has told this couple they do not have the legal authority to “refinance” the note. I agree. Only the party with the “necessary interest” has the right to refinance the note. Chase doesn’t even have the legal authority to do a “new loan” as the servicing lender because (in my opinion as a paralegal) it doesn’t have legal authority to disrupt the “chain” of recordations.

    We started a letter writing campaign to Chase Bank NA. After 4 letters (including one copied to U.S. Rep. Dennis Moore from Kansas), Chase now says they will not “release the note and mortgage to the couple” (which the couple never asked them to do; the specifically asked to be able to come and view it with their attorney to compare all peripheral notes, etc. with their copies) because the paperwork is “proprietary”.

    This couple intends on getting discovery in front of the court. In my humble opinion as a paralegal (and you can argue with me on this) DISCOVERY WINS CASES. Properly put forward, discovery will make Chase Bank submit these documents to the court. My guess is, Chase does not have these documents because this note was securitized and Chase only has copies. This will come out in Court after the couple Motions to Compel for production.

    The couple further intends to ask for the entire “chain” to produce documentation from all “intervening assignees” so they can track all legal filings and aspects of the “chain” to determine whether there were flaws in the notarization or the recordation of all pertinent documents. The intent is to ask for rescission of contract plus treble damages for fraud.

    I will keep all of you posted as to the status of this case. Please bear in mind that as a paralegal, none of what I say can be construed as legal advice.

  5. For those of you who think you don’t own your home.
    Think about this; who has that grant deed?
    The owner of course!
    A lien conveys no interest in title.
    So how can the banks foreclose?
    They can’t!!!!!

  6. We can add Ohio to this list even though the recent Ohio S.Ct. decision does not specifically state MERS.

  7. drew at proofin dot com

  8. Drew – Are you in the Cities? I would like to network with you offline. I know many in need of expert counsel in MN.

  9. Like I said in the previous post, ask them what they scored on the LSAT. Next make sure they are litigators, that is also very important. Good luck with your hunting for an attorney. Let me know if I can help you. I truly know the stress and pressure your under. I cant say I’ve been to combat, however I have a good feeling of PTSD from dealing with this case. If you ever need someone to talk to let me know. It helps to know you are not alone in this mess.

  10. Drew,

    Thank you for your prompt
    answer. I appreciate it.

    I am in Calif.

    Hopefully someone in need in MN
    reading our exchange will have
    the good fortune of connecting
    with your competent counsel.
    OBVIOUSLY, “they get it”.

    I will likely only be able to afford
    ONE go round with an attorney;
    and if I pick the WRONG one,
    I will be Pro Se for sure. May have
    to go that way anyway. I just feel
    like I am WAY out my league in
    a One on One legal dogfight.

    I will PLAY to WIN, I promise
    you THAT.

  11. What state are you in? I am in MN

  12. Drew?

    Can you kindly tell me what State you are in?
    Do your attorneys work in other States?

  13. Here is some advice, take it or leave it. I have found that when you are interviewing attorneys, a question that should be asked is what was your LSAT score and ranking? The attorney I retained was in the top 2 percent nationwide and his associate was in the top 3 percent. When we have gone to court (hearings/motions/ect.) They have hands down beat the crap out of opposing counsel. To the point that opposing counsel said “Its just not fair your Honor they can not rescind their mortgage. If you allow them to rescind then everyone in foreclosure could.” I almost soiled myself laughing. We were granted our TRO. My guess is “its just not fair” is a legal argument!! Keep up the fight and stick it to them. What I have found in my case is that if you fight them, they have systems and procedures (paperwork). However they hardly ever go to court (it shows). Keep up the fight and thanks be to Neil and Brad for the MOST EXCELLENT strategies and legal theories. Without you and the “training” I received from this site my family and I would be homeless. As it looks now we may end up with our house unencumbered!!! When the smoke clears I will post the mountains and mountains of paper.

  14. Alina,

    OK “Reverse” it is. There was another posting today that the Bucci’s lawyer is APPEALING. (((HAPPY)))

  15. Deontos,

    The paragraph I copied and pasted re: Cheryl R. Marchant, a Vice President of Aurora Loan Services, LLC (“Aurora”), says it all in my mind.

    First, Lehman filed bankruptcy on September 15, 2008 and was allowed to fail. This has been touted by the media as the reason for the collapse of Wall Street.

    While in bankruptcy, a stripped down Lehman’s was bought by Barclays. Barclays then split the remainder of Lehman’s up and sold the pieces last year. (Lehman’s no longer is an existing viable company)

    Secondly, La Salle was purchased by Bank of America in 2007 and officially adopted its name in 2008. (LaSalle no longer is an existing viable bank)

    Unless, there is some POA or other type of agreement transferring authority from Barclay’s and/or Bank of America to MERS, MERS could not possibly be the agent. “Successors and assigns” only goes so far.

    Where has this judge been in the past year? Has he not seen the headlines re Lehman’s? This judge needs to be educated. We do not need a reverse and remand, but simply a reverse.

  16. Alina,

    Apparently Kansas and Rhode Island exist on DIFFERENT PLANETS or in UNPARALLEL UNIVERSES. Generous Judge here probably isn’t interested in “black letter law”, just gets by affirming corporate policy as if it were Law. MOCKERY and HYPOCRISY. I take heart in that this was a Superior Court Decision and justice will ring the Liberty Bell when I hear **Reversed and Remanded**. Better yet this guy quits masquerading as a Judge and goes to work as a clerk at his local foreclosure mill.

    Full File:



    Filed – August 25, 2009
    BUCCI :
    v. : C.A. No.: PC-2009-3888


    SILVERSTEIN, J. Before this Court for decision are the Plaintiffs’ requests for a declaratory judgment and injunctive relief.1 The Plaintiffs ask this Court, inter alia, to cancel a scheduled foreclosure sale of their home. The Plaintiffs argue that Mortgage Electronic Registration Systems, Inc. (“MERS”), under the facts of this case, lacks standing to foreclose under the Rhode Island Statutory Power of Sale. Jurisdiction is pursuant to sections 8-2-13 and 9-30-1 of the General Laws of Rhode Island, 1956, as amended.


    A. MERS

    Several courts across the country have described MERS’s role in the lending industry. See, e.g., MERSCORP, Inc. v. Romaine, 861 N.E.2d 81, 83 (N.Y. 2006); Jackson v. Mortgage Elec. Registration Sys., Inc., Civ. No. 08-305 (JNE/JJG), 2008 WL 413293, at *2 (D. Minn. Feb. 13, 2008); In re Huggins, 357 B.R. 180, 183 (Bankr. D. Mass. 2006); Mortgage Elec. Registration Sys., Inc. v. Nebraska Dep’t of Banking, 704 N.W.2d 784, 785-88 (Neb. 2005). “In 1993, the MERS system was created by several large participants in the real estate mortgage industry to track ownership interests in residential mortgages.” Romaine, 861 N.E.2d at 83 (footnote omitted). “Mortgage lenders and other entities, known as MERS members, subscribe to the MERS system and pay annual fees for the electronic processing and tracking of ownership and transfers of mortgages.”

    C. Statutory Authority for MERS To Foreclose

    The Plaintiffs argue that Rhode Island statutory law implicitly prohibits MERS from invoking the Statutory Power of Sale. The Defendants contend that Rhode Island statutory law does not prohibit a mortgagee in a nominee capacity from invoking the Statutory Power of Sale.

    When reviewing a statute, the Court must “give effect to the purpose of the act as intended by the Legislature.” Labor Ready Ne., Inc. v. McConaghy, 849 A.2d 340, 344 (R.I. 2004). “It is well settled that when the language of a statute is clear and unambiguous, this Court must interpret the statute literally and must give the words of the statute their plain and ordinary meanings.” Accent Store Design, Inc. v. Marathon House, Inc., 674 A.2d 1223, 1226 (R.I. 1996). However, the Court should “not allow [itself] to be blindly enslaved to the literal reading of statutes when to do so would defeat or frustrate the evident intendment of the legislature.” Town of Scituate v. O’Rourke, 103 R.I. 499, 507, 239 A.2d 176, 181 (1968).

    The Plaintiffs concede that no Rhode Island statute explicitly prohibits MERS, as mortgagee in a nominee capacity, from foreclosing on a residential real estate mortgage
    7 See Pls.’ Mem. Supp. Mtn. Partial Summ. J. 1 n.2, July 14, 2009.
    under a Statutory Power of Sale. (Draft Trial Tr. 16:6-17:15.) Notwithstanding, the Plaintiffs argue that certain Rhode Island statutes implicitly prohibit MERS from foreclosing as a mortgagee in a nominee capacity.7

    The first statutory provision upon which the Plaintiffs rely is § 34-11-22, which describes the Statutory Power of Sale in a mortgage. The Plaintiffs argue that this section allows only “the mortgagee or his, her or its executors, administrators, successors or assigns” to exercise the power. They argue that because MERS is not a mortgagee, but rather a “nominee-mortgagee,” MERS cannot invoke the Statutory Power of Sale. The Defendants contend that § 34-11-22 allows a mortgagee to invoke the Statutory Power of Sale, and that MERS is a mortgagee. Here, the Court finds that MERS is the mortgagee because the Mortgage executed by the Buccis so states. (Pls.’ Ex. 1B at 1.) No other entity is named in the Mortgage as being a mortgagee. The fact that MERS acts in a nominee capacity for the lender and the lender’s successors and assigns does not diminish MERS’s role as the mortgagee nor is there created a new legal term “nominee-mortgagee.” Nothing in the Rhode Island statutes prohibits MERS, as mortgagee in a nominee capacity, from foreclosing under the Statutory Power of Sale.

    The Plaintiffs further argue that the language of § 34-11-21, the Statutory Mortgage Condition, demonstrates that the General Assembly intended that the mortgagee and lender would always be one and the same. Section 34-11-21 states that “the mortgagor . . . shall pay to the mortgagee or his or her heirs, executors, administrators, or assigns the principal and interest . . . .” (Emphasis added). The Plaintiffs argue that because the Buccis do not pay principal and interest to MERS, MERS cannot be a mortgagee. The Defendants argue that Plaintiffs’ narrow

    11 , 529 A.2d 633, 637 (R.I. 1987). If this Court were to construe § 34-11-21 as the Plaintiffs suggest, it would be an absurd result because named mortgagees and lenders would be precluded from employing servicers to service and collect obligations secured by real estate mortgages. Clearly, the General Assembly envisioned a role for mortgage servicers in the mortgage lending industry. , interpretation of this section would undermine the role of servicers in the mortgage lending industry. This Court finds that § 34-11-21 does not prohibit MERS from invoking the Statutory Power of Sale. Statutes should not be construed to reach an absurd result. See Brennan v. KirbySeee.g., G.L. 1956 § 34-26-8(a)(4), as amended by P.L. 1995, ch. 95-131, § 1 (including mortgage servicer within the definition of “mortgagee” for purposes of § 34-26-8). Accordingly, this Court finds that MERS, while not the lender, may invoke the Statutory Power of Sale as the mortgagee.

    For the foregoing reasons, this Court denies the Plaintiffs’ requests for declaratory and injunctive relief, and specifically holds that MERS, in the case at bar, has standing to and may foreclose the mortgage granted to it by the Plaintiffs by utilizing the Statutory Power of Sale referenced therein.

    Counsel for the prevailing party shall submit an order and judgment to be settled upon notice.

  17. Now I know the Rhode Island court got it wrong. Check this out from the decision:

    Cheryl R. Marchant, a Vice President of Aurora Loan Services, LLC (“Aurora”), stated by affidavit that the Note and the Mortgage are serviced by Aurora. (Defs.’ Ex. B ¶ 4.) Further, she stated that “[t]he Note has been indorsed in blank and is currently held by LaSalle2 as [] custodian for the beneficial owner of the Note and/or its agents (including MERS) for whom MERS, in its capacity as mortgagee, is the nominee of the beneficial owner of the Note.” Id. ¶ 5.

  18. Neil,

    Although there are some inroads being made with regard to MERS’ standing, there are still many states out there that favor MERS. Following is a commentary on a recent Rhode Island case:

    MERS’ Standing to Foreclose Upheld in Rhode Island State Court Challenge

    September 2009

    Jeffrey H. Gladstone, Esq.
    David J. Pellegrino, Esq.

    Rhode Island is the most recent state in a long line of jurisdictions to rule that Mortgage Electronic Registration Systems, Inc. (“MERS”) has standing to foreclose. The Rhode Island court further ruled that MERS, as mortgagee and nominee for the mortgagee, may exercise the statutory power of sale in its own name.

    The case of Bucci v. Lehman Brothers Bank, et al., C.A. No. PC 09-3888, was filed in the Providence County Superior Court. The facts of the underlying action are typical of many foreclosure scenarios occurring across the country. A loan was originated and the borrower executed a promissory note made payable to the lender. Contemporaneously, as security for the repayment of the promissory note, the borrower granted a mortgage on the residential property to MERS. The mortgage was granted by the borrower/mortgagor to MERS as nominee for the Lender, granting all the rights and privileges of a mortgagee to MERS, including the statutory power of sale.

    As with many non-judicial jurisdictions, Rhode Island’s legislature enacted a statutory process allowing a mortgagee to foreclose on its mortgage following a borrower’s default. Rhode Island General Laws § 34-11-22 codifies the statutory power of sale, which many, if not all MERS originated mortgages incorporate by reference (“Statutory Power of Sale”).

    The borrower eventually defaulted on its repayment obligations under the terms of the promissory note. The loan was accelerated and the borrower failed to cure. Non-judicial foreclosure proceedings were commenced whereby, pursuant to Rhode Island’s statutory scheme, a notice of foreclosure was sent to the borrower and foreclosure notices were published in the statutorily prescribed form and manner.

    In this case, prior to the scheduled foreclosure date, the borrower filed a complaint seeking injunctive relief to enjoin the foreclosure sale. The complaint alleged, inter alia, that: the Rhode Island statutory scheme does not allow MERS to exercise the Statutory Power of Sale in the mortgage because Rhode Island does not recognize a “nominee mortgagee”; MERS, because it is not the Lender, does not have standing to foreclose; and MERS is precluded from foreclosing because it is not the owner of the promissory note. The Court granted the initial request for relief pending a substantive hearing on the issues. In an unusual procedural move, the Court administratively consolidated dozens of other cases raising similar issues throughout Rhode Island. Five days later, a preliminary injunction hearing was held and, pursuant to Rule 65(a)(2) of the Rhode Island Rules of Civil Procedure, the Court consolidated the preliminary injunction hearing with the trial on the merits.

    Following the full hearing, on August 25, 2009, the Court issued its decision denying the borrower’s requests for relief. In so ruling, the Court “specifically [held] that MERS, in the case at bar, has standing to and may foreclose the mortgage granted to it by the Plaintiffs utilizing the Statutory Power of Sale referenced therein.”

    After a brief description of MERS’ functions, the Court first considered MERS’ contractual right to foreclose pursuant to the mortgage document. Citing directly to the mortgage, the Court noted that the borrower granted “the Statutory Power of Sale to MERS, as nominee for Lender, its successors and assigns.” The Court went on to quote the mortgage which stated that: “if necessary to comply with law or custom, MERS (as nominee for Lender and Lender’s successors and assigns) has the right to exercise any or all of those interests, including, but not limited to, the right to foreclose and sell the Property[.]” (Emphasis in decision). In addition, the Court, rejecting certain of the borrower’s other contentions, found that the “fact that paragraph twenty-two of the mortgage states that the Lender ‘may invoke the STATUTORY POWER OF SALE’ does not negate the previous language in the mortgage directly granting MERS, as mortgagee in a nominee capacity, the right to invoke the Statutory Power of Sale.” Accordingly, MERS has the contractual right to exercise the Statutory Power of Sale because it is the named mortgagee and nominee of the Lender, and its successors and assigns, and MERS was acting on behalf of the beneficial owner of the promissory note.

    Next, the Court tackled the borrower’s assertion that MERS does not have the statutory authority to foreclose. First, the Court determined that there is no express statutory prohibition impacting MERS’ ability to foreclose. Next, citing the Statutory Power of Sale, the Court determined that because the “mortgagee or his, her or its executors, administrators, successors or assigns” can exercise the power of sale, so too can MERS as the mortgagee. Simply put, the Court found that MERS “is the mortgagee because the mortgage executed by the [borrower] so states.” “The fact that MERS acts in a nominee capacity for the lender . . . does not diminish MERS’ role as the mortgagee nor is there created a new legal term ‘nominee mortgagee.’” Therefore, not only is there “[n]othing in the Rhode Island statutes prohibit[ing] MERS, as mortgagee in a nominee capacity, from foreclosing under the Statutory Power of Sale,” MERS “may invoke the Statutory Power of Sale as the mortgagee.”

    Through its decision, the Court, in the clearest language addressed the various challenges that have been asserted against MERS’ authority to foreclose under Rhode Island law. As a result, the multitude of pending cases seeking to enjoin Rhode Island foreclosures by attacking MERS’ standing will most likely be resolved in a perfunctory and consistent manner in favor of MERS. An appeal by the borrowers is anticipated.

    I would encourage Neil to see if he can assist with the appeal. Obviously, the state court has it wrong and we need to prove it.

  19. Check out more of MERS delirious comments to their co-fraudsters!

    Kansas Supreme Court Decision: Frequently Asked Questions
    Frequently Asked Questions on the
    Kansas Supreme Court Decision

    Q: Can you sum up the decision?

    A: On August 28, 2009, the Kansas Supreme Court issued a decision in the case of Landmark National Bank v. Boyd A. Kesler. Our involvement with this case stemmed from the fact that we did not receive notice of the lawsuit which we were entitled to receive. The Kansas Supreme Court, who did not want to reopen a case that had already been decided by a lower court, went out of its way to write a narrow opinion that had more to do with finality of judgments than it did with MERS. This case was not a MERS foreclosure nor was it about our standing to foreclose.

    Q: What does the ruling mean?

    A: MERS can continue to foreclose and is entitled to receive notice when MERS is the mortgagee because the Court did not say otherwise. In fact, the Court went out of its way to emphasize the narrow scope of its ruling by stating: “Even if MERS was technically entitled to notice and service in the initial foreclosure action—an issue that we do not decide at this time…” Moreover, foreclosures can continue to be prosecuted in the name of MERS because the Court made no mention of this issue.

    Q: How will the ruling affect the operations of your members?

    A: The decision is actually quite limited in its scope and as such should have little effect on the day-to-day operations of MERS members. However, we do believe that the ruling is confusing and goes against longstanding precedent. This is not the end of the judicial process.

  20. Here is all the Jill Arnolds’ in TX

    JILL R ARNOLD Born May 1975
    840 REDWING ST Record Created: 03/2002
    BRIDGE CITY, TX 77611 (409) 735-5711

    JILL ARNOLD Born Oct 1953
    2225 WESTSIDE DR Report Record Created: 08/2002
    DEER PARK, TX 77536 (281) 542-0949

    JILL ARNOLD Born 1980
    2225 WESTSIDE DR Report Record Created: 08/2002
    DEER PARK, TX 77536 (281) 542-0949

    JILL ARNOLD Born 1980
    2225 WESTSIDE DR Report Record Created: 08/2002
    DEER PARK, TX 77536 (281) 542-0951

    JILL ARNOLD Born Oct 1953
    2225 WESTSIDE DR Report Record Created: 08/2002
    DEER PARK, TX 77536 (281) 542-0951

    JILL ARNOLD Born 1967
    1030 DALLAS DR Report Record Created: 01/2002
    DENTON, TX 76205 (940) 898-8288

    JILL ARNOLD Born 1967
    1030 DALLAS DR Report Record Created: 01/2002
    DENTON, TX 76205

    JILL J ARNOLD Born Mar 1967
    2925 PENNIMAN RD
    DENTON, TX 76209 (940) 898-8288

    JILL N ARNOLD Born Dec 1973
    3300 FALLMEADOW ST Report Record Created: 05/2001
    DENTON, TX 76207

    JILL J ARNOLD Born 1970
    8932 JILL ST Record Created: 03/2006
    FORT WORTH, TX 76108 (817) 367-0977

    20751 SPRING ROSE DR Report Record Created: 05/2001
    KATY, TX 77450

    JILL M ARNOLD Born Sep 1968
    LEWISVILLE, TX 75067 (972) 315-3412

    JILL A ARNOLD Born 1959
    3306 CORDOVA DR
    TEMPLE, TX 76502 (254) 771-0299

    2525 SHILOH RD
    TYLER, TX 75703 (903) 534-1580

    2525 SHILOH RD Report Record Created: 01/2005
    TYLER, TX 75703 (903) 561-1402

  21. FOR zurenarrh,

    Don’t know how much help this will be..?
    But here are Dallas area “Jills”, one of them
    may be the signer on your PAPERS.

    This is as close as I could narrow down.

    2380 Performance Drive,
    Richardson, TX 75082

    NOTE: Jill may be “short” for ACTUAL name Jillian

    Jill M Arnold (age: 40)
    ===>>To Recontrust office: 15.5 mi
    Dallas, TX 

    Jill Marie Arnold
    Jill Watson
    Jill A Watson
    Jill Arnold Watson
    Jill A Watson


    Jillian M Jamesarnold age: 28
    ===>>To Recontrust office: 15.5 mi
    Dallas, TX 
    Jillian James
    Jillian M James
    Jillian M Jamesarnold


    Jill Nicole Arnold
    ===>>To Recontrust office: 15.5 mi
    Dallas, TX 
    Jill Arnold
    Jill N Arnold
    Jill Nicole Arnold
    Jill N Boyer Arnold
    Jill N Fulbright
    Jill N Fullbright


    Jill Arnold (Plano, Texas)
    ===>>To Recontrust office: 18mi
    Plano texas US
    Age 34


    Jill Watson (Arnold) (Denton, Texas)
    ===>>To Recontrust office: 42mi
    Denton texas US
    Age 41

  22. Deontos,
    I have no idea how MERS can rightly be classified as “lenders.” They’re not, and they know they’re not. And we all know they’re not.

    I don’t know if Oregon or Arizona (or the counties where the foreclosures are happening) gave them that designation or if MERS told those states or counties therein to designate them that way.

    Once again your commentary proves insightful, particularly this:

    “Additionally, in many states around the nation, ‘lenders’ are momentarily becoming ‘MERS’ to execute fraudulent assignments to servicers.”

    Two comments/questions about that:

    1. What the lenders are doing by becoming limited actors for MERS (or whatever company they need to hide behind) is carrying out a false flag operation to try to fool the public, the borrowers, and the courts.

    I discovered last night how low they will sink to do this. The theft of my property–I mean, “foreclosure”–is being carried out in the name of Recontrust, the trustee named in my Deed of Trust. A woman named Jill Arnold who I think gets a paycheck from Recontrust, acted as an assistant secretary of MERS to assign the Deed of Trust AND the Note (which MERS has no interest in or control of) to Bank of America.

    I’ve been trying to find out who she really works for, or a MySpace or Facebook page or something. But she either doesn’t have one or, since her name is so common, it’s difficult to wade through all the “Jill Arnolds” on Facebook, etc.

    Anyway, I found another “assistant secretary” for Recontrust who had a much less common name–Heidi Recinos. I was able to find her MySpace page, on which she reveals that she’s 25 years old and graduated from Simi Valley High School in 2002. No college. Her employer? Countrywide, where she said she works as a “foreclosure officer.”

    Recontrust acknowledges on its various websites that it is a member of “the Countrywide family of companies” but that is structured to be totally independent so that regulators and investors can feel better about it. But is it really “independent” to have a nominal Countrywide employee carrying out foreclosures for Recontrust?

    I’m assuming that there are similar shenanigans going on vis a vis Jill Arnold, but can’t be certain.

    2. Why does MERS assign Notes and Deeds of Trust to servicers? Anyone who knows even a little bit about the mortgage industry knows that servicers are merely bill collectors. The servicer certainly hasn’t given any consideration for the Note/Deed. Wouldn’t it therefore be easy as pie to just point THAT one fact out to a judge?

  23. I believe this is the key in their announcement:

    “In this case, the originating lender, a MERS member, was named as a defendant, but no longer held any interest in the mortgage loan and was no longer the servicer. The plaintiff mistakenly did not name MERS as a defendant even though, pursuant to the Kansas statutes, the mortgage was recorded naming MERS as the mortgagee. The current note holder, also a MERS member, became aware of the action and sought to intervene on its own after entry of the default judgment. But because the member was not the recorded mortgagee, the member was meeting resistance from the trial court on its right to do so. At that point, the member alerted MERS to the issue, but it was too late.”

    Remember MERS repeatedly states to its Members that as long as a mortgage is assigned from member to another, there is no need to record in the county records. The Kansas Supreme Court sees things differently. It stated that MERS was not entitled to notification not only because it was the nominee but because its principal did not record the mortgage pursuant to Kansas statutes.

    In this announcement, MERS is erroneously trying to assure its Members that it’s ok not to record mortgages when MERS has been named as the “mortgagee of record” or “nominee.”

  24. […] Arkansas Supreme Court Denies MERS Legal Standing « Livinglies’s Weblog. […]

  25. SilentDoGoodJR: Interesting. So what MERS is telling its members in point 2 of their “Announcement
    Number 2009-06” is that MERS MUST also be sued in these cases with two “MERS mortgages.” This is yet another example of the many and massive conflicts of interest going on when MERS is involved. MERS members no doubt have “hold harmless” agreements in place with MERS that would conflict with the above directive, or a “fiduciary obligation” would certainly conflict with the above if these pretender lenders were really “MERS officers.” Additionally, in many states around the nation, “lenders” are momentarily becoming “MERS” to execute fraudulent assignments to servicers. The above directive would create an additional conflict of interest by requiring that the “lender” then sue MERS.

  26. zurenarrh,
    How can they be designated as “Lenders”?

    More of the same HERE:
    This is in AZ instead of Oregon

    File Format: Microsoft Excel – View as HTML
    8, Mark A Willis, Willis, Mark, 6231 E Mallory St, Mesa, AZ, 85215, 2116, 7/8/09, Sfr, Notice Of Trustee’s Sale, 3/26/09, Mortgage Electronic Rgstrtn ……/55368_572009113101AM291.xls

    This is in CALIF:

    Note1: This popped up in Google when I searched the EXACT abbreviation used in the Oregon filings: “Mortgage Electronic Rgstrtn”
    Note2: On this AZ “.xls” sheet it lists TWO LENDERS. MERS as “FORECLOSE LENDER ” and then a


  27. I’ve never seen this before…MERS is listed as “lender” at this site:

  28. JPMorgan chase says he is successor in interest to WAMU Bank. WAMU is on the original note. JPMorgan Chase is now bringing the suite.
    Does Chase has legal standing? No docs showing Chase having an assignment. They also claim that they lost the note and want to re-establish. I have to file my response in 10 days

  29. I read this sentence again and was struck by a phrase that did not stick out to me before:

    “The plaintiff mistakenly did not name MERS as a defendant even though, pursuant to the Kansas statutes, the mortgage was recorded naming MERS as the mortgagee.”

    What Kansas statute says MERS is a mortgagee? What Kansas statute permits the recording of mortgages with a straw-man company as mortgagee/beneficiary/nominee?

    What the hell is MERS smoking?

  30. Interesting find, SilentDoGoodJr.

    In this announcement, MERS says this:

    “The plaintiff mistakenly did not name MERS as a defendant even though, pursuant to the Kansas statutes, the mortgage was recorded naming MERS as the mortgagee.”

    What MERS fails to understand or publicly acknowledge about the Kansas decision is this–words have meaning. Words represent things or states of being and if one uses words that don’t accurately represent a state of being, even and especially in a contract, then the choice of words is in error, not the state of being.

    Words like “beneficiary,” “mortgagee,” and “nominee” all have established meanings and legal definitions that do not describe the functions MERS serves. Those words certainly do SOUND official and important and give the impression of authority and propriety, but again, they do not apply to MERS’ state of being in a mortgage transaction.

    The scholarly MERS article posted here a few days ago takes up this idea:

    “The American legal tradition looks to the economic realities of a transaction in determining whether a business is a secured creditor—including a mortgagee…

    Contracts creating mortgages are construed as such even where the parties choose to describe the bargain with different language.

    It is equally axiomatic that where contracts do not create a mortgage, courts will not construe one to exist merely because of boilerplate language in the written memorialization of the deal.

    MERS is not a mortgagee (or an assignee) simply because ink on paper makes this assertion—rather the law compels courts to look to the economic nature of the transaction to identify MERS’ role.”


    Which is exactly what the Kansas Supreme Court did.

    Peterson goes on to pinpoint even further why MERS is not what it claims to be (p. 19):

    “Indeed, the fundamental economic reality of MERS involvement in the mortgage lending industry suggests that MERS is not a mortgagee with respect to any loan registered on its database.

    A mortgagee is simply the party to whom a parcel of real estate is mortgaged. Or, as Blacks Law Dictionary explains, a “mortgagee” is “[o]ne to whom property is mortgaged; the mortgage creditor, or lender. — Also termed mortgage-holder.”

    MERS is not the party to whom family homes are mortgaged for at least three fundamental economic reasons.
    First, MERS does not fund any loans. No money coming out of a MERS deposit account is tendered as loan principal to homeowners.
    Second, no homeowners promise to pay MERS any money. To this effect, MERS is never identified as the payee in a promissory note and MERS is never entitled to receive any monthly payments from the mortgagor.
    Finally, and perhaps most important, MERS is never entitled to receive the proceeds of a foreclosure sale. Instead, these funds go to the actual mortgagee (or assignee of the mortgagee) that is the true owner of the lien.”

  31. oh yea… it took Mers 3 years to reconvey & record the title after i refi’d the last loan. yup …they sure are on top of it…NOT!

  32. Look what MERS is telling their co-fraudsters on the MERS website:

    Number 2009-06
    To: All MERS Members October 1, 2009
    Re: Kansas Supreme Court Decision
    On August 28, 2009, the Kansas Supreme Court issued a decision that some in the press have tried to interpret to have a broader impact than the actual Court’s finding. The Court’s ruling in Landmark National Bank v. Boyd A. Kesler, Kansas Supreme Court, No. 98,489 is quite limited because it involves the vacating of a final judgment. The Kansas Supreme Court did not want to disturb the final judgment. MERS continues to be entitled to notice and service of foreclosure actions when M ERS is the mortgagee because the Court did not say otherwise. In fact, the Court went out of its way to emphasize the narrow scope of its holding by stating: “Even if MERS was technically entitled to notice and service in the initial foreclosure action–an issue that we do not decide at this time…” Moreover, foreclosure actions can continue to be prosecuted in the name of MERS because the Court made no mention of this issue. Essentially, the Court held that in this particular case, because a default judgment had already been entered, and the property sold to a third party, the trial court did not abuse its discretion in denying a motion to vacate.
    In this case, the originating lender, a MERS member, was named as a defendant, but no longer held any interest in the mortgage loan and was no longer the servicer. The plaintiff mistakenly did not name MERS as a defendant even though, pursuant to the Kansas statutes, the mortgage was recorded naming MERS as the mortgagee. The current note holder, also a MERS member, became aware of the action and sought to intervene on its own after entry of the default judgment. But because the member was not the recorded mortgagee, the member was meeting resistance from the trial court on its right to do so. At that point, the member alerted MERS to the issue, but it was too late.
    To prevent the circumstances that led to the decision from happening again, we remind and urge all M ERS members to take the following steps:
    1) If a member is named as a defendant in a lawsuit involving a MOM mortgage loan that the member originated, and MERS is not named as a defendant, please alert the MERS Law Department right away at mers@mers This should be done even when the MERS member no longer holds any interest in the mortgage loan. Do not simply ignore the lawsuit.
    2) Any MERS member that is foreclosing a mortgage loan in the member’s name, or having MERS foreclose the lien as the mortgagee, and MERS holds another mortgage lien for another mortgage loan on the property, the member should instruct its counsel that MERS must be named as a defendant as the mortgagee for the other mortgage loan and served with the lawsuit.
    3) Make sure that when MOM mortgages are recorded, the County Recorders and Clerks are indexing the mortgages correctly to reflect MERS as the mortgagee, grantee, etc.
    4) Provide counsel representing MERS with proper documentation, information and an explanation of M ERS and its interest in the mortgage. If you are unsure about what to provide, contact the M ERS Law Department at mers@mers

  33. …I don’t care where your from that there is funny!! I am thinking both stink..

  34. hmmmm
    Mers then is comparable to say quantum mechanics / quantum physics .
    Hence the phenomena – of the smallest particles of matter can posses either properties of a soild [particle] & gas [wave] .
    Physicists have found compelling evidence that the only time electrons and other “quanta” manifest as particles is when we are looking at them. At all other times they behave as waves.

    MERS = a fart or a turd?

  35. Thanks, Deontos. MERS really is playing a mind game–it’s maddening to read through their policies.


    I just emailed the Pulitzer Prize Livinglies Comment Writers
    Selection Committee. {{{Laughing}}}

    zurenarrh ……. They think your MERS
    Metaphor Expose is a winner!

    Now if we could just get a few
    more JUDGES to read and
    “GET” the seriousness of
    what you are saying.


    From MERS forum…

    -Yes, MERS is “beneficiary”:

    Administrator-“When MERS is the beneficiary of the deed of trust by either being named as such on the deed of trust at the time of loan closing or by receiving an assignment of the deed of trust at a later date, then under Nevada state law MERS is the proper party. If a default occurs, then MERS, as the beneficiary, may direct the trustee to exercise the power of sale in a foreclosure under the Deed of Trust. Or, if MERS has assigned the deed of trust to another entity, perhaps to the servicer, than that entity has the authority to foreclose.”

    -No, a party other than MERS is “beneficial owner”:

    Administrator-“MERS serves as mortgagee of record in the public land records as nominee for the beneficial owner of the mortgage loan. ”

    -So what the hell is MERS?
    Administrator-“MERS is neither the lender nor the servicer for loans registered on the MERS System.”

    MERS is acting like it can only be explained through Zen koans, like “Ask not what MERS is–for MERS is what it is not.” Or maybe “Neither servicer, lender, or noteholder are we; MERS is only nominee (or beneficiary–or whatever we need to say in court to pull the wool over a judge’s eyes).”

    Or how about this one:
    A student asks, “What is MERS’ policy?”
    His master replies, “First there is an assignment. Then there is no assignment. Then there is.”

    OK, last one:

    A student asks, “What does MERS do?”
    His master replies, “If the law is a lion, then MERS is its tamer; if the law is a cobra, MERS is its charmer; if the law is a moon, MERS is its eclipse; if the law is a raging river, MERS is its dam.”

  38. Still reading on the MERS forum and found this very interesting reply from the forum administrator:

    “MERS does not own the notes for loans that were registered on the MERS System and therefore we do not have the right to sell those notes. The mortgage company that serviced the loan has that responsibility and should be your source of information.”

    This was from June 2009. So since MERS doesn’t own my note, how in hell’s bells can they legally assign my deed of trust “together with the note” as they did back in July? Short answer: they can’t.


  39. Once again, this ruling probes not only Neil’s predictions but also the fact that “SOME” judges are starting to understand the fast one that these “thieves” are trying to pull on us, remember: it doesn’t matter how much oil these evil people put into their EVIL machine, i can hear it grinding!! slowly but surely, their time is coming, JUDGEMENT DAY it’s approaching for these unscrupulous “pretender lenders”, i shall live ’til the day i see them down on their knees just like many of us are now. They can only play their game for so long, before they strike out. They are running out of time fast; ever seen a fish out of the water taking it’s last gasps? Long live america, free of these parasites and thieves with licenses to steal from us!!!

  40. Todays Phx. AZ news. Couple finds an old CD which is now worth $400,000 but the original bank had been sold and resold, now the current bank is saying they can’t find the CD in their files and they don’t know who should pay the couple. Sounds like the banks are using a reverse “produce the note” theory to keep from paying them.

  41. […] See also Arkansas Supreme Court stating the same principles and citing to Kansas: arkansas-supreme-court-denies-mers-legal-standing […]

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