Quit Litigating The MERS And Assignment Issues To Stop Foreclosure!! Law Offices of Kenny Tan Attorneys Diamond Bar California

Quit Litigating The MERS And Assignment Issues To Stop Foreclosure!!

Posted by: Kenny Tan
September 14, 2011
Topic: Foreclosure

The messages from the Courts of Appeal in California are loud and clear - Quit litigating the MERS and assignment issues.

Back in 2009, several cases had been filed in California challenging MERS authority to commence foreclosure. The argument is that MERS didn't have any standing to foreclose because it didn't own the note and therefore if you had MERS as the "nominee for the beneficiary" on your deed of trust, you can stop the foreclosure on that ground or preempt lender's commencement of foreclosure by filing your own lawsuit first (as in the Gomez case).

Gomez is the first of several California appellate decisions that dealt with the question of whether MERS had standing to foreclose. It all started in a bankruptcy case filed Minnesota in 2008 where the bankruptcy court held MERS had no standing to file its proof of claim because it didn't own the note. Then later in 2009, a bankruptcy court in In Re Walker similarly held on a motion ruling that was unopposed by the lender. A few days ago, in Robinson v. Country wide, a different district in the California Court of Appeal published a similar opinion on an almost identical issue.

"Show me the note" defense is practically dead in California. While borrowers are frustrated in not being able to identify who the current holder of their note is, the Courts are not concerned who really holds the note as long as someone does which probably is the situation in almost all cases. The bottom line is money is owed to somebody.

So the message is "don't expect the courts to lend you a hand if you're looking to the courts for help on some mere technicalities".

In In Re Walker, the bankruptcy court stated that since MERS was not the holder of the note in the first place, it didn't have the right to assign the note since you can't assign something you don't own. The argument is since the assignment was invalid from MERS to the first assignee, any subsequent assignments to others are null and void, and therefore the last assignee didn't have the standing to foreclose as it didn't own the note. This issue has been dealt with recently. It is now abundantly clear how the California state courts feel about this issue. While these appellate opinions are based on some legal authorities and arguments, as the courts must in writing appellate decisions, you get the sense that courts have grown more and more impatient about borrowers trying to take advantage of mere technicalities to delay foreclosure.

If you're still googling the MERS issues in hope of finding an answer about stopping foreclosure, my question to you is "You live in California? Or where have you been in the last year?".