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.
II. FACTUAL BACKGROUND
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