LAS VEGAS -- A case before the Nevada State Supreme Court next week could have far-reaching impact on Nevadans struggling to stay in their homes. Among the issues before the justices is what proof lenders must provide to show they own the property they seek to foreclose.
This is the first time the state supreme court will consider issues related to the use of MERS, the Mortgage Electronic Registration System. During the housing boom, banks created MERS to serve as the mortgagee of record for lenders which allowed properties to change hands without publicly recording each transfer.
But in order to foreclose, banks must be able to establish the chain of title on a property and often use MERS which has no financial interest in the loan to show ownership. Whether that is legal is among the questions before the court.
The case stems from a foreclosure mediation involving Andrew and Loretta Davis, a Reno couple. According to court records, during the mediation, US Bank used documents listing MERS to show it had the right to foreclose. MERS, according to the bank, assigned the original lenders' interests in the Davis loan to US Bank. The mediator concluded that wasn't enough to establish ownership but the district court disagreed. Attorney Tisha Black-Chernine, who is not involved in the case, says nationwide courts are split with regard to MERS.
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