A California bankruptcy court says Mortgage Electronic Registration Systems cannot help a trustee establish legal standing to foreclose on a securitized mortgage unless the trustee already possesses an actual assignment of interest in the loan.
The case — Salazar v. U.S. Bank — comes out of California's Southern District U.S. Bankruptcy Court and is attracting attention from foreclosure attorneys as it seems to contradict another ruling, Gomes v. Countrywide.
While the bankruptcy court's decision is only binding in its own jurisdiction and is tied to a very narrow issue filed in bankruptcy court, the opinion does challenge the role MERS plays in the foreclosure process when dealing with securitized loans held by a trustee. California uses a nonjudicial foreclosure process.
Read on.
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