In questions certified from the United States District Court, the Supreme Court of the State of Washington En Banc concludes that MERS is not and cannot be a lawful beneficiary under Washington State Law. They decline to opine on the effect of the decision but the effects are obvious. They essentially said that only the real creditor (“the actual holder of the promissory note”) and who therefore has the power to appoint a substitute trustee could be a lawful beneficiary.

They rejected all arguments to the contrary, and reaffirmed that the power of sale is a “Significant Power” and thus the deed of trust should be liberally construed in favor of the borrower. The Court also reaffirmed the many decisions about the duties and obligations of trustees that have been routinely ignored by the banks and servicers. “… the process should provide an adequate opportunity for interested parties to prevent wrongful foreclosures.”

Their reasoning boils down to the old saying”you can’t pick up one end of the stick without picking up the other end too.” In this case their point was that financial institutions could not avoid the state recording laws and systems and then use those same laws to foreclose.

The Court also leaves open the door for actions in damages against MERS and those who used MERS for wrongful foreclosures.

see Bain Ruling


42 Responses

  1. […] Mers Goes Down in Flames in Wa Supreme Court Decision ( […]

  2. I do hope MERS burns to the ground.
    See this case where MERS also lost:

  3. Generally I do not read article on blogs, but I would like to say that this write-up very pressured me to take a look at and do so! Your writing taste has been amazed me. Thank you, very great post.

  4. Oregon Supreme Court is exspected to do the same as WA with MERS soon. I hope MERS burns. It was set up for fraud to skirt around unmovable loans. Cloueded titles and to do the banks bidding to steal from every woman man and child. LIBOR rating scandal is part of the mortgage scandal also. LIBOR is listed on my deed of trust.

  5. Noone here is a peasent . Come on JG Come on

  6. The notion of a trust asset as the beneficiary of that object makes no sesnse . In the MersCorp case, they never said they assigned anything ….the nominee is the object of a Grantor trust and corpus under a Conveyance , transfer , contribution and sale of equity converted from debt and held as an entity [SPV] and not an interest in a mortgage (its late guys …late in the game to be discussing this really )


  7. .
    ms said:
    “a nominee cannot appear where the nominating party is disclosed ”
    That’s very interesting and if true (rather makes sense since disclosing the principal in the instrument would generally defeat the purpose of having a nominee in a LEGITIMATE deal, but is it law?) as a matter of law, pity that we have not learned it before now. I’d be interested in knowing, since I think you prescribe this to law) where this is found. Obviously it isn’t general knowledge to us peasants.

    Seems you are saying MERS is not a nominee, therefore it’s the ben, which seems to conflict with your prior sentence (not the one I cited).
    It’s just an illegitimate schematic: make a computer program the beneficiary and try to hand back the expressed nominee’s alleged rights (the beneficiary’s interests are limited to rights – period ) to others, but only if they pay for the privilege. Even if they didn’t pay for the privilege, it’s still illegitimate. A member employee or now even
    non-member employee (think robo-signors) is appt an officer of the computer program for the sole purpose of exercising alleged rights of the nominee beneficiary (or even beneficiary if your argument were to hold water) because the computer program has no employees to exercise any rights it alleges to hold. This is first and foremost unconscionable, wherein I could substitute the words “woefully wrong”, I suppose, never minding all the legal entanglements. That’s about as much as I’m biting, but true to form, it would be no surprise I couldn’t ignore it completely or even leave it at “surely you jest?”

  8. MersCorp cannot assign anything. You have known this or should have known this as Mers Corp is listed as a nominee on the recirded instrument .

    The beneficary is named prima facsica to the note and security instrument
    listed . . .a nominee cannot appear where the nominating party is disclosed – the nominee is a nullity . Mers Corp is none the less

    a beneficary and one is woefully wrong to attack the Mers Corp role in these structured deals.

  9. K.S. My introduction of MERS to the U.S. Supreme Court on page 10 documents MERS as a counterfeiting tool– If you have comments please post on my blog. Comments will NOT be published.

  10. Hi everyone. Allow me to introduce myself. I am Kristin Bain’s mom. I am a paralegal. I always thought there was something wrong with the notice of foreclosure, so I referred my daughter to Melissa Huelsman. We were right! In this case, you have three women (Melissa Huelsman, my daughter and me who have dug our heels in and said, “This is wrong!” For the record, my daughter has a trust fund that she could have gotten an emergency loan from to cure the default, but the underlying facts made us fight this. MERS was one of the underlying facts. The other fact is that my daughter has severe ADD and signed herloan with IndyMac at a 19% INTEREST RATE, and she didn’t even know it. So we decided to fight – not just for Kristin but for everyone. I am so proud of my daughter!

  11. You answered your own question: MERS cannot assign anything. Any assignments made via MERS would be void. Homeowner sues for quiet title. Lender would have to produce signed title transfers of EACH beneficiary, with an UNBROKEN chain, Washington’s law mandates that, it’s just not enforced in court in NON-Judicial foreclosures. This is going to get very interesting.

  12. OK, the WA court says that MERS has no power to appoint a substitute trustee. Mr. Arnold from MERS says that MERS cannot assign anything–if I remember right. So what if MERS assigns the Deed of Trust/mortgage to a bank who then claims to be the owner of the note in order to foreclose. The bank then assigns the substitute trustee. How would that affect any foreclosure past and present? And all assignments done after the Notice of Default. And in many cases MERS has been assigning the note along with the deed because they claim to be the beneficiary of all. What remedy, if any, would the already foreclosed homeower have?

  13. MERS cannot be a beneficiary in a mortgage chain of title.

    Here’s the JUICIEST BIT and the piece that many Op/Eds keep missing:

    MERS not cannot act as A BENEFICIARY; Not just to foreclose, but to


    The chain of titles on most mortgages travels from the original lender-to MERS-to foreclosing lender. ***MERS CAN NO LONGER MAKE THAT TRANSFER!!*** So now, they must (just as in Florida and the the 23 other JUDICIAL states) re-create the transfers (signatures etc.) and this was the birth of “Robo-Signing”.

    THIS is the bomb that dropped yesterday. MERS hasn’t been foreclosing in it’s own name in Washington State for over a year… they simply transferred just prior to foreclosure to whomever was foreclosing. That will all FULL STOP.

    I predict that very soon, nearly all foreclosures in the State of Washington will either be delayed or withdrawn completely, because MERS in involved in most chains of title.

    Thank you Washington Supreme Court for your just opinion.

  14. I may change my handle to “gotcaselaw”.

    For those who don’t have it, you can download the pdf of the opinion at


    This article is interesting, informative, and worth looking at if only for the images – they’re great.

  16. So they refused to chop off MERS’ head, but they did bloody MERS’ nose real good and knocked out several MERS teeth. And dislocated MERS’ shoulder. And broke MERS’ legs. MERS is in bad shape!

  17. sounds like these guys figured it out. Hooray for all you MERS people.
    There is hope. Slow but sure. Keep your eyes out for other favorable rulings and put them in front of your attorney.

  18. Love this quote from the decision:

    “But MERS offers no authority for the implicit proposition that
    the lender’s nomination of MERS as a nominee rises to an agency relationship with successor noteholders. MERS fails to identify the entities that control and are accountable for its actions. It has not established that it is an agent for a lawful principal.”

    These guys–Washington Suco–are ON IT!

  19. Social Apocalypse, Routh Crabtree Olsen is a lawfirm. They perform judicial foreclosures. These court decisions have given them-and other lawfirms- more work, not less.

  20. Very few mtg companies or banks are foreclosing in the name of MERS anymore. And in any event, I’m seeing borrowers who are years behind on their home loans. I view this as a straw man and that some of you are supporting fraud and default. What would I be if I didn’t pay my deed of trust loans for years on end? I’ll give you a hint. First part of the word is “home”, second part is “less”.

  21. Isn’t the bottom line that an unsecured creditor cannot take possession of property? Of any kind?

  22. The thing is, Washington had a great statute to begin with, which clearly defined what a beneficiary is.–and MERS is of course not a beneficiary. MERS is not a beneficiary in any state or in any sense of how the word “beneficiary” is normally used. I argued this to death in my complaint in my state to no avail because unfortunately for me, In my state, there is no statute comparable to Washington’s that defines “beneficiary.” So too bad I didn’t buy a house in Washington instead…

  23. Wow! This is amazing! Good work, Washington–you have lived up to the name of your state!

  24. @Hman if you have a good FDCPA claim, attorneys fees are covered under the statute. See if you can find an attorney who will litigate it without charge to you. I don’t know but it’s worth a shot.

  25. yes John, but a nominee normally only has a certian time period to funcitno as a nominee, it’s usually not an indefinate open ended nominee period. I think MERS should only have had standing to be a nominee for that 90 day period during up to the “cut off date”, wasn’t it? No one has addressed these issues except Maher Soliman.

  26. I mean no disrespect to the AZ jurists. Having said that and hoping my schnoz doesn’t grow, they are out to lunch! When the Trust Act was legislated, there was no thought or intent that the ben of a dot
    would not be the same party called the lender in the note. With reliance that those designations would always describe only one party, the lender, called the ben in the dot instrument, the beneficiary was accorded certain rights therein. Those rights flow from the promissory note and there is NO way it is otherwise. It may take going back to the committee notes, etc. to convince the AZ court that it is being downright absurd in ruling that the collateral instrument may be enforced without interest in the debt which gave rise to the coll instrument.
    And while I’m at it, “rights” are all the beneficiary has in a deed of trust
    (because the dot trustee holds title to the real estate, not the ben).
    They are not insignificant by any means so not implying otherwise.
    A nominee may hold legal title to an asset of another, but may a nominee hold “legal title” if the asset is a right? I just don’t think so.
    Never mind here MERS or what mers otherwise may or may not do as a nominee. The answer to my question doesn’t depend on who the nominee is, I do believe.

  27. @needcaselaw – thumbs up
    @enraged – yep! as to the ref to dot trustee’s by the WA SC – yep again!
    Now a challenge for those outside Washington is to examine the
    decision and see if it is peculiar to WA statute and or if in fact the rationale, or any part of it, of the WA SC might be incorporated into pleadings elsewhere.

  28. Hman – You are asking the wrong questions. The entire fraud perpetrated is all fake. There is no note. Your note was used in exchange for stock which the depositor put into trust. What goes into trust can’t come out. If a note is brought into court endorsed in blank it is like a cancelled check. If they are claiming it is worth value, it is a fraud claim You need to talk to someone who can teach you what really happened. Wealth of information

  29. Yesterday Felix Hernandez, pitcher for a team that has been losing since we can’t remember when, pitched a no-hitter. It was perhaps prophetic. Because, although the plaintiff’s did not score that many runs in their clear victory before the Washington Supreme Court, MERS scored zero. They are finished, done in Washington – with the door left open to let the cards fall as they may for wrongs already committed. I salute the courage of the Court in standing up for the law and their responsibility.
    This is in stark contrast to a justification for denials of relief from stay that have been appearing in another judicial forum recently where it has been cited, “[t]o allow the automatic stay to be lifted with respect to this action at this time would prompt similar motions and . . . [t]he distraction and expense of defending such litigation would interfere with judicial economy and the Debtors’ process of reorganization.” Yes, the Washington Supreme Court opinion will open the doors to a spate of litigation which will clog the courts; but the court’s duty is to administer the law, not to look the other way when doing so may cause incovenience. Look, for another example, to Florida’s “Rocket Docket.”
    This entire financial mess in which we find ourselves has at its root a distrust of the law (that those too-big-to-fail are above it – and so for the rest of us it’s hopeless). I, for one, find my faith renewed in some sense of justice in this country; and that mean’s that there is hope. I salute the Washington Supreme Court.

  30. Glad somebody finally got it Right. Wish this verdict had some effect on AZ, CA, FL, etc…AZ sucks! They’ve decided the note isn’t required t foreclose and MERS is legit.

    Anyway, I’m still fighting and living in MY HOUSE. I think maybe once upon a time MER’s could have possibly been considered Valid beneficiary, BUT once the lender on the DOT was gone the buck should have stopped there.

    I have a question that I’m wondering if someone has a moment to speculate on.

    My servicer was Aurora. Allegedly, They claim I was over a year past due on my mortgage. My loan was sold to NationStar. (Actually, I believe all Aurora loans were). So how can NationStar try to foreclose now? Aren’t they just another Debt collector? Is there anyway to find out how much they paid for these loans? I know I could try and go FDCPA route but I’d have to fight in federal courts and the banks would bleed me til I’m out of money and they’d win.

    My theory is that if Nationstar paid a reduced amount for the loan portfolio than my mortgage should be reduced by that amount. If they paid 60% of the note amount than there should be a 40% reduction in my note amount?

    Anyone have any thoughts or idea please share. I’m welcome to suggestions. Thank you!

  31. 48 maybe. Won’t happen in MN. Did you see the shout out WA Sup Ct. gave to the MN statue and court decision kissing the MERS behind?


    We’ve been waiting for that forever! Stop paying your mortgage and see the banks scramble to clean up their mess!

    “To dismiss such sound policies as “extreme” in the face of the repeatedly demonstrated failure and fraud of our current financial system is quite absurd. The idea is not to nationalize banks, but to nationalize money, which is a natural public utility in the first place. The fact that this idea is hardly discussed today, in spite of its distinguished intellectual ancestry and common sense, is testimony to the power of vested interests over good ideas.” [ i.e., bankster media blackout ]

    Nationalize Money, Not Banks by Herman Daly

    July 30, 2012. Herman Daly, Emeritus Professor University of Maryland School of Public Policy

    We Don’t Have To Be In Financial Crisis

    In the article below, Herman Daly, a University of Maryland and former World Bank economist, makes the case for 100% reserves. This reform, once a principle goal of important economists, would terminate the ability of the banking system to create credit to finance its own speculations and return the power over money to the government from private banks.

    Herman Daly is one of the few economists who are capable of thinking outside the box and who can devise reforms that benefit the people rather than the vested interests.

    If our present banking system, in addition to fraudulent and corrupt, also seems “screwy” to you, it should. Why should money, a public utility (serving the public as medium of exchange, store of value, and unit of account), be largely the by-product of private lending and borrowing? Is that really an improvement over being a by-product of private gold mining, as it was under the gold standard? The best way to sabotage a system is hobble it by tying together two of its separate parts, creating an unnecessary and obstructive connection. Why should the public pay interest to the private banking sector to provide a medium of exchange that the government can provide at little or no cost? Why should seigniorage (profit to the issuer of fiat money) go largely to the private sector rather than entirely to the government (the commonwealth)?

    Is there not a better away? Yes, there is. We need not go back to the gold standard. Keep fiat money, but move from fractional reserve banking to a system of 100% reserve requirements. The change need not be abrupt—we could gradually raise the reserve requirement to 100%. Already the Fed has the authority to change reserve requirements but seldom uses it. This would put control of the money supply and seigniorage entirely with the government rather than largely with private banks. Banks would no longer be able to live the alchemist’s dream by creating money out of nothing and lending it at interest. All quasi-bank financial institutions should be brought under this rule, regulated as commercial banks subject to 100% reserve requirements.

    Banks cannot create money under 100% reserves (the reserve deposit multiplier would be unity), and banks would earn their profit by financial intermediation only, lending savers’ money for them (charging a loan rate higher than the rate paid to savings or “time-account” depositors) and charging for checking, safekeeping, and other services. With 100% reserves every dollar loaned to a borrower would be a dollar previously saved by a depositor (and not available to the depositor during the period of the loan), thereby re-establishing the classical balance between abstinence and investment. With credit limited by saving (abstinence from consumption) there will be less lending and borrowing and it will be done more carefully—no more easy credit to finance the leveraged purchase of “assets” that are nothing but bets on dodgy debts.

    To make up for the decline and eventual elimination of bank- created, interest-bearing money, the government can pay some of its expenses by issuing more non interest-bearing fiat money. However, it can only do this up to a strict limit imposed by inflation. If the government issues more money than the public voluntarily wants to hold, the public will trade it for goods, driving the price level up. As soon as the price index begins to rise the government must print less. Thus a policy of maintaining a constant price index would govern the internal value of the dollar. The external value of the dollar could be left to freely fluctuating exchange rates.

    Alternatively, if we instituted John M. Keynes’ international clearing union, the external value of the dollar, along with that of all other currencies, could be set relative to the “bancor,” a common denominator accounting unit used by the payments union. The bancor would serve as an international reserve currency for settling trade imbalances—a kind of “gold substitute”.

    The United States opposed Keynes’ plan at Bretton Woods precisely because under it the dollar would not function as the world’s reserve currency, and the US would lose the enormous international subsidy that results from all countries having to hold large transaction balances in dollars.

    The payments union would settle trade balances multilaterally. Each country would have a net trade balance with the rest of the world (with the payments union) in bancor units. Any country running a persistent deficit would be charged a penalty, and if continued would have its currency devalued relative to the bancor. But persistent surplus countries would also be charged a penalty, and if the surplus persisted their currency would suffer an appreciation relative to the bancor.

    Keynes’ goal was balanced trade, and both surplus and deficit nations would be expected to take measures to bring their trade into balance. With trade in near balance there would be little need for a world reserve currency, and what need there was could be met by the bancor. Freely fluctuating exchange rates would also in theory keep trade balanced and reduce or eliminate the need for a world reserve currency. Which system would be better is a complicated issue not pursued here. In either case the IMF could be abolished since there would be little need for financing trade imbalances (the IMF’s main purpose) in a regime whose goal is to eliminate trade imbalances.

    Returning to domestic institutions, the Treasury would replace the Fed (which is owned by and operated in the interests of the commercial banks). The interest rate would no longer be a target policy variable, but rather left to market forces. The target variables of the Treasury would be the money supply and the price index. The treasury would print and spend into circulation for public purposes as much money as the public voluntarily wants to hold. When the price index begins to rise it must cease printing money and finance any additional public expenditures by taxing or borrowing from the public (not from itself). The policy of maintaining a constant price index effectively gives the fiat currency the “backing” of the basket of commodities in the price index.

    In the 1920s the leading academic economists, Frank Knight of Chicago and Irving Fisher of Yale, along with others including underground economist and Nobel Laureate in Chemistry, Frederick Soddy, strongly advocated a policy of 100% reserves for commercial banks. Why did this suggestion for financial reform disappear from discussion? The best answer I have received is that the great depression and subsequent Keynesian emphasis on growth swept it aside because limiting bank lending to actual savings was too restrictive on growth, which became the big panacea. Also there is the obvious vested interest of commercial banks in retaining the privilege of creating money and lending it at interest.

    Now suppose for a moment that aggregate growth has begun to increase environmental and social costs faster than production benefits, thus becoming uneconomic growth. There is much evidence that this is the case. Then a financial constraint on growth (balancing investment with abstinence) would be much needed, and 100% reserves would be a good way to accomplish it. If, however, growth remains the summum bonum of the economy, then we will inevitably borrow against our hoped for larger future income to finance the investments needed to produce it.

    Financing investment by saving would require less present consumption, which many will deem to be an unacceptable drag on growth. But real growth has encountered the biophysical and social limits of a “full world.” Financial growth is being stimulated ever more in the hope that it will pull real growth behind it, but it is in fact pushing uneconomic growth- — growth of “illth.” Since illth is negative wealth it can hardly redeem the growing debt that is financing it.

    The original 100% reserve proponents mentioned above were in favor of aggregate growth, but wanted it to be steady growth in wealth, not speculative boom and bust cycles. Soddy was especially cautious about uncontrolled physical growth, but his main concern was with the symbolic financial system and its disconnect from the real system that it was supposed to symbolize. The result was confusion between wealth and debt. One need not advocate a steady-state economy to favor 100% reserves, but if one does favor a steady state the attractions of 100% reserves are increased.

    How would the 100% reserve system serve the steady-state economy?

    First, as just mentioned it would restrict borrowing for new investment to existing savings, greatly reducing speculative growth ventures—for example the leveraging of stock purchases with huge amounts of borrowed money (created by banks ex nihilo rather than saved out of past earnings) would be severely limited. Down payment on houses would be much higher, and consumer credit would be greatly diminished. Credit cards would become debit cards. Long term lending would have to be financed by long term time deposits, or by carefully sequenced rolling over of shorter term deposits. Growth economists will scream, but a steady-state economy does not aim to grow, for the very good reason that growth has become uneconomic.

    Second, the money supply no longer has to grow in order for people to pay back the principal plus the interest required by the loan responsible for the money’s very existence in the first place. The repayment of old loans with interest continually threatens to diminish the money supply unless new loans compensate. With 100% reserves money becomes neutral with respect to growth rather than biasing the system toward growth by requiring more loans just to keep the money supply from shrinking.

    Third, the financial sector will no longer be able to capture such a large share of the nation’s profits (around 40%!), freeing some smart people for more productive, less parasitic, activity.

    Fourth, the money supply would no longer expand during a boom, when banks like to loan lots of money, and contract during a recession, when banks try to collect outstanding debts, thereby reinforcing the cyclical tendency of the economy.

    Fifth, with 100% reserves there is no danger of a run on a bank leading to a cascading collapse of the credit pyramid, and the FDIC could be abolished, along with its consequent moral hazard. The danger of collapse of the whole payment system due to the failure of one or two “too big to fail” banks would be eliminated. Congress then could not be frightened into giving huge bailouts to some banks to avoid the “contagion” of failure, because the money supply is no longer controlled by the private banks. Any given bank could fail by making imprudent loans, but its failure, even if a large bank, would not disrupt the public utility function of money. The club that the banks used to beat Congress into giving bailouts would have been taken away.

    Sixth, the explicit policy of a constant price index would reduce fears of inflation and the resultant quest to accumulate more as a protection against inflation. Also it in effect provides a multi-commodity backing to our fiat money.

    Keynes bancor scheme or a regime of fluctuating exchange rates would automatically balance international trade accounts, eliminating large surpluses and deficits. Thus, there would no longer be any need for the International Monetary Fund and the austerity its “conditionality” imposes on weaker economies.

    To dismiss such sound policies as “extreme” in the face of the repeatedly demonstrated failure and fraud of our current financial system is quite absurd. The idea is not to nationalize banks, but to nationalize money, which is a natural public utility in the first place. The fact that this idea is hardly discussed today, in spite of its distinguished intellectual ancestry and common sense, is testimony to the power of vested interests over good ideas. It is also testimony to the veto power that our growth fetish exercises over the thinking of economists today.

  33. Some very good comments within the WA Court’s decision regarding duties of Trustees, which may be helpful to you in trying to obtain info about your loan from the PRLAP:

    “Trustees have obligations to all of the parties to the deed, including the homeowner. RCW 61.24.010(4) (The trustee or successor trustee has a duty of good faith to the borrower, beneficiary, and grantor.); Cox v. Helenius, 103 Wn.2d 383, 389, 693 P.2d 683 (1985) (citing George E. Osborne, Grant S. Nelson & Dale A. Whitman, Real Estate Finance Law 7.21 (1979) ([A] trustee of a deed of trust is a fiduciary for both the mortgagee and mortgagor and must act impartially between them.)).4 Among other things, the trustee shall have proof that the beneficiary is the owner of any promissory note or other obligation secured by the deed of trust and shall provide the homeowner with the name and address of the owner of any promissory notes or other obligations secured by the deed of trust before foreclosing on an owner-occupied home. RCW 61.24.030(7)(a), (8)(l).”

  34. Hi Rick: This does not apply to your loan because we cannot find evidence of MERS in the mix. But it’s an excellent law that will help many homeowners fight illegal foreclosure.

  35. Kudos to the Washington attorneys, Richard Llewellyn Jones.(Bellevue) and Melissa Huelsman that took this case to the Supreme court!

  36. I think those scum bags will have to get the dodge out of WA during the middle of the night. Anyone got NWTS stock? Maybe we should buy it short.

  37. On Aug 16, 2012 3:56 PM, “Livinglies’s Weblog” wrote: > > Neil Garfield posted: “In questions certified from the United States District Court, the Supreme Court of the State of Washington En Banc concludes that MERS is not and cannot be a lawful beneficiary under Washington State Law. They decline to opine on the effect of the decisio” >

  38. So, now what? If they bring the original promissory note into court with a blank endorsement. Are we doomed becuase the opposing side (servicer) holds the original note?

  39. I would think Oregon will follow suit

  40. This is a HUGE victory!! Well, the foreclosure mill titans of Washington State (Routh Crabtree & Olsen) are going to have to take on day jobs… Thank GOD

  41. only 49 more to go !

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