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Nevada Supreme Court Unanimous Decision Sides with Banks Regarding MERS

In a 26-page ruling delivered Thursday, all seven justices agreed that hundreds of thousands of home mortgages in the state involving the Mortgage Electronic Registration System Inc. could be put into foreclosure after technical adjustments.

Incorporated by banks in 1995 and still owned by them, MERS is a database that tracks mortgages for its members as they pass among different owners, sometimes as part of securities that bundle hundreds or thousands of loans into one package.

In doing so, MERS has dispensed with the long-standing requirement that a lender file papers with a county recorder every time a loan changes hands.

PATH CLEARED FOR FORECLOSURES

"I think it is good that MERS has been validated," Nevada Bankers Association President William Uffelman said. "The whole thought behind it was bringing loan recording into the 21st century."

In Nevada, attorney Jacob Hafter said, who argued the case for homeowner David Edelstein, "the court has cleared a path to begin foreclosing in a mass effort."

"I think the court basically took the (Edelstein) case to say they are not going to let homeowners get out of paying on their mortgages on a technicality," he said.

MERS spokeswoman Janis Smith, in a statement, said: "There is no stronger affirmation of MERS' role in housing than a unanimous decision concluding that MERS is the proper beneficiary and affirms MERS agency relationship to the note holder."

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