Mortgage Electronic Registration Systems, the real estate registry at the center of foreclosure litigation, says a U.S. Bankruptcy Court in Massachusetts validated a MERS title assignment this week despite the promissory note moving through a succession of owners.
The case was decided by Bankruptcy Judge Melvin Hoffman who said "Massachusetts law allows a mortgagee with no interest in the underlying obligation to foreclose, the trustee's argument that MERS did not have a sufficient interest in the debtor's property to foreclose the mortgage fails."
The judge added, "the fact the debtors' promissory note passed like a hot potato down a line of owners, including some in bankruptcy and liquidation, with no accompanying assignment of the note holders beneficial interest in the mortgage, changes nothing."
"The court has taken note of MERS' unchanging role as mortgagee when a loan is transferred, and also noted that this role does not change unless and until MERS itself assigns the mortgage to another entity," the Reston-Va.-based company said.
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