In a precedental decision, on October 27, and August 25, the Pennsylvania Superior Court at Case No. 1328 WDA upheld the Opinion and Order of Judge Michael McCarthy in the Allegheny County Court of Common Pleas at Case No. GD-06-031037, providing that Mortgage Electronic Registration Systems, Inc. (MERS) retains the control and authority to foreclose on a mortgage even after it has executed and recorded an Assignment of the beneficial interest in the underlying Note and Mortgage to an unrelated third party. The dockets can be viewed at the Pennsylvania Superior Court website, Case No. 1328 WDA and at Allegheny County Court of Common Pleas website, Case No. GD-06-031037.in proceedings at GD-08-013334 Parkvale Bank in Monroeville, PA exalts the Judge's decision. The Court Records indicate that prior to the foreclosure sale, MERS assigned all of its beneficial interest in the Note and Mortgage to a third party, a non-member of MERS, pursuant to an Assignment of Mortgage recorded in the Recorders Office of Allegheny County. The Assignment was executed by Robert Hardman, Vice President of MERS. Records in the United States Bankruptcy Court for the District of Delaware demonstrate that the mortgage was discharged from the records of the MERS-member upon assignment. MERS own published rules state that upon their executing and recording an Assignment of Mortgage, they no longer have an interest in the Mortgage. However, in the case referenced, the Court ruled to the contrary.in addition to the issues surrounding MERS assigning all of its interest in the mortgage, other issues involving MERS lack of jurisdiction were addressed by the homeowners in the case challenging the sale. Upon the homeowners' challenge to the sale, without addressing the jurisdictional issues, Judge McCarthy simply opined that MERS retained the authority and control over the mortgage, irrespective of the Assignment. His Order was upheld by a panel of 3 in the Pennsylvania Superior Court. MERS own public website states: Mortgage Electronic Registration Systems, Inc. (MERS) is a proper party that can lawfully foreclose as the mortgagee and note-holder of a mortgage loan. MERS Membership Rule 8 provides required guidelines that must be followed when MERS is the foreclosing entity. Please click here to access the Rules of Membership, and reference the Rule 8 requirements. Also posted on MERS site is a Legal Primer which boasts a sampling of cases in various states that address the standing of MERS to foreclose its mortgages. Under Pennsylvania, the legal primer documents state in part: Pennsylvania law has long recognized the standing of a named mortgagee to foreclose on the security interest, even if there are other entities interested in the amount claimed. This writer, however, can find no legal authority in which Pennsylvania or any other state has recognized the standing of an unnamed mortgagee, or a party who has sold the beneficial interest in the Note and Mortgage to another, to foreclose on anothers security interest, as in the case mentioned here.in this case, MERS, a national database that processes paperwork for lenders for a fee without actually taking ownership of the note or mortgage, was initially named as a mortgagee on behalf of American Home Acceptance Corporation, who, along with seven of its affiliates, filed bankruptcy in the United States District Court for the State of Delaware. From a review of the docket and records filed in the bankruptcy proceeding, it would appear that if MERS were in fact a legally-named mortgagee with the authority to foreclose, their actions would or should have been subject to approval by the United States Bankruptcy Court. It would appear that MERS has found a way to conduct its business while circumventing the federal laws as well. This is a multi-million dollar company growing its assets by challenging our laws in one way or another to take what it pleases. Since the Assignee in the case referenced is a non-member of MERS, it would appear that MERS is applying an Ill show you tactic in order to force every lender to become a paying member, i.E., become a member of MERS or well take it by force. The ruling of the Courts is pending an appeal for a review by the Pennsylvania Supreme Court, and if not overturned, the ruling will set a precedent in which MERS will have carte blanche to do as it pleases with regard to any property. Additionally, this ruling would certainly contest the rights of the lenders who actually own the mortgage, whether or not they are a paying member of MERS, since MERS would have the ability to foreclose without regard to who actually owns the mortgage. Whether or not any of your loan documents reflects the name Mortgage Electronic Registration Systems, Inc. Or MERS, regardless of whether or not your lender is a Member of MERS pursuant to their own Rules and Regulations, and regardless of whether or not they are collecting your payments on behalf of your mortgage company, please be aware that the decision as it stands can affect you. This decision, if not overturned, means that MERS can successfully foreclose on your property even if you are currently making your payments to your real lender. As in this case, MERS shall receive the proceeds from the foreclosure sale, while the "real" lender, first in lien priority, shall remain unpaid and continue collecting the payments due under the legal note and mortgage from you. References: Pennsylvania Superior Court: Docket Index No. 1328 WDA 2008; Allegheny County Court of Common Pleas: Case Nos. GD-06-031037 and GD-08-013334; US Bankruptcy Court for the District of Delaware, Debtors: American Home Mortgage Holdings, Inc., et al, Case Nos. 07-11047,07-11048,07-11049,07-11050,07-11051,07-11052,07-11053,07-11054.
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