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MERS Admits MERSCORP not MERS Performs Functions

MERS Admits MERSCORP not MERS Performs Functions

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Published by johngaultwhoam
MERS say MERS is the nominee of record while MERScorp does any lifting. The alleged beneficiary in
deeds of trust is a computer program - MERS has no employees.
MERS say MERS is the nominee of record while MERScorp does any lifting. The alleged beneficiary in
deeds of trust is a computer program - MERS has no employees.

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Published by: johngaultwhoam on Aug 19, 2012
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 IN THE UNITED STATES DISTRICT COURTFOR THE DISTRICT OF MASSACHUSETTS__________________________________________)STEPHEN LEZAMA, et al., ))Plaintiffs, ))v. ) Civil Action No. 09-10168 RGS)DEUTSCHE BANK NATIONAL TRUST CO., )et al., ))Defendants. )__________________________________________)
Mortgage Electronic Registration Systems, Inc. (“MERS”),
pursuant to FederalRule of Civil Procedure 12(b)(6), moves to dismiss Plaintiffs’ Complaint (the “Complaint”)because it fails to state a claim against MERS upon which relief can be granted.
Plaintiffs’ Class Action Complaint as to MERS is woefully deficient on its face,as it fails to allege viable claims against MERS. The Complaint fails to allege any fact or reasonfor MERS to be involved in this lawsuit. Indeed, the allegations contained in the Complaintshow that MERS was not involved whatsoever in the wrongful foreclosures for which thePlaintiffs complain.
The Complaint names Mortgage Electronic Registration Systems, Inc. as a Defendant, which is a wholly-owned subsidiary of MERSCORP, Inc. As explained,
MERSCORP, Inc. tracks both the beneficialinterests in, and servicing rights to, mortgage loans as they travel through the marketplace. MERSCORPInc.’s subsidiary MERS is the mortgagee of record as the nominee for lenders, and the lenders’ successorsand assigns.
Case 1:09-cv-10168-RGS Document 36 Filed 04/02/09 Page 1 of 18
 2The gravamen of the Complaint is that foreclosure proceedings have beenwrongfully conducted against Plaintiffs, who are Massachusetts residential mortgage loanborrowers. Plaintiffs claim that, as a result of these wrongful foreclosures, this Court shoulddeclare such proceedings to be “void.” Specifically, Plaintiffs allege that their residences wereforeclosed upon, in violation of Massachusetts statutes, by entities that did not have the legalauthority to do so under the state’s statutory power of sale. In so doing, the Complaint allegesthat these foreclosing entities violated Massachusetts statutes by inaccurately representing inwritten notices that they had the authority to foreclose. But MERS was not one of the entitiesforeclosing. In other words, the Complaint deals exclusively with the conduct of parties whohave foreclosed on property owned by the Plaintiffs (and the Plaintiffs alleged to be in theputative class). But as such, the Complaint is without basis as to MERS, and it fails to allege thatMERS did anything wrong.As alleged in the Complaint, MERS was the original mortgagee with respect tosome of the Plaintiffs’ loans. But Plaintiffs do not allege that MERS ever exercised the power of sale against any of the Plaintiffs, or that MERS ever participated in or sent notice to anyone inconnection with foreclosure proceedings. To the contrary, the Complaint contains detailedfactual allegations identifying specifically the entities that undertook such conduct, and MERS isnot among them. What is more, it is clear from the face of the public records referenced andrelied upon in the Complaint,
, the allegedly wrongful notices and other documentation of theforeclosure proceedings, that MERS had nothing to do with the alleged wrongful foreclosures.Plaintiffs surely cannot be heard to claim that MERS violated any statutory orcommon law duties relating to conduct in a foreclosure process in which MERS is not alleged tohave played a part. Yet, in the absence of factual allegations of wrongful conduct, Plaintiffs
Case 1:09-cv-10168-RGS Document 36 Filed 04/02/09 Page 2 of 18
 3collectively include MERS as one the “Named Foreclosure Defendants” and the “Defendants’Class,” against whom, without any reference to MERS, all three Counts in the Complaint arealleged. Such allegations are insufficient, even under the minimal requirements of noticepleading, to state a claim against MERS.Finally, as alleged in the Complaint, MERS no longer holds any interestwhatsoever in any of Plaintiffs’ mortgages, having assigned away all rights it once held asmortgagee. There is, therefore, no reason for MERS to be a party to this lawsuit, and it should bedismissed.
By way of background, it may be helpful to discuss who MERS is, what role itplays in real estate loans and mortgages, and its relationship with lenders and other mortgagees.As a separate entity, MERS is the mortgagee of record until such time that MERS assigns themortgage or the mortgage is satisfied. In this case, MERS assigned the mortgages to variousentities, who are now alleged to have wrongfully conducted foreclosures under the proceduresset forth in the Massachusetts statutes.
Lenders And The Residential Mortgage Market
When a mortgage lender loans money to a home buyer, it obtains two documents:(1) a promissory note in the form of a negotiable instrument from the borrower; and (2) amortgage instrument. A promissory note is generally a negotiable instrument under Article 3 of the Uniform Commercial Code, and as such, it is bought and sold.
See In re MERSCORP, Inc., RESPA Litigation
, MDL No. 1810, 2008 U.S. Dist. LEXIS 40473 (S.D. Tex. May 16, 2008), at*14.The mortgage, as distinguished from the note, is the lien on the property thatsecures the repayment of the loan, and it is the mortgage, not the note, that is recorded in the
Case 1:09-cv-10168-RGS Document 36 Filed 04/02/09 Page 3 of 18

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