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Supreme Court Declines to Review MERS Challenge - Upholds Right of MERS to Foreclose in California

Dsnews.com – by Krista Franks

The United States Supreme Court has denied a writ of certiorari in a case involving MERS, refusing to reconsider a California court ruling, which upheld MERS’ right to initiate foreclosures.

The case in question, Gomes v. Countrywide, was originally decided by Judge Steven R. Denton, who ruled that the language in the deed of trust allows MERS to initiate non-judicial foreclosure actions and that the borrower concedes this right to MERS when he or she signs the deed of trust.

“Courts in California have ruled consistently that MERS’ legal standing as beneficiary gives MERS the authority under state law to take action on behalf of the owner of the note,” said Janis Smith, MERSCORP’s VP of corporate communications in a statement announcing the Supreme Court’s denial of the case.

She added that Gomes’ claim “lacks merit” and that “[a]s stated in the deed of trust, Gomes agreed by executing that document that MERS has the authority to initiate a foreclosure.”

“The MERS business model has been upheld by numerous courts around the country, and is operating in all 50 states,” Smith added.

However, MERS issued a policy update in July stating that MERS will no long initiate foreclosure actions.

Gersten believes MERS’ foreclosure actions were not legal and it “does away with land laws” when initiating foreclosure actions. When a homeowner faces foreclosure, he or she should at least know who is filing the foreclosure “and who has a legal right to foreclose,” he stated.

Together with the ruling from the 9th Circuit Court - Cervantes vs. Countrywide (please see 9th Circuit Court Ruling Legitimizes MERS) gives legitimacy to MERS and deals a major blow to many of the arguments that attorneys representing homeowners try to make.

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