Jeff Barnes of Foreclosure Defense Nationwide breaks down the significance of the decision by the Supreme Court of Rhode Island in the case of Chhun v. MERS:
“The homeowners had sued for declaratory relief, quiet title, and punitive damages, alleging that the MERS Assignment had no effect as it was signed by someone who was an employee of Aurora (and not MERS), and that MERS did not order the assignment to Aurora. The Court found that these allegations satisfied the requisite pleading standard and reversed the Superior Court’s ruling.“
Why this particular case is a come-to-Jesus on the part of the Rhode Island Supreme Court I couldn’t tell you, but the fact that MERS–the computer database that is named in mortgages and on assignments, not the parent corporation, MERSCORP–has no employees is not new. The fact that the signers/executors of the MERS assignments do not work for MERS and in fact work for the would-be foreclosing entities is not new.
MERS assignments have no effect
But the best part of the Chhun ruling is that, at least in the Chhun case, the MERS assignment was found–correctly–to have no effect [UPDATE 4-18-14: the Chhun ruling did not decide that MERS assignments have no effect, it only reversed a lower court’s motion to dismiss]. I have written about this before and have shared it with others, but in my own lawsuit against MERS and others, MERS came out and admitted that their assignments have no effect. I know of no other such admission (not saying one doesn’t exist), so I always feel compelled to share it, especially now that the fact that MERS assignments have no effect has been acknowledged by the highest court of a state [see above Update from 4-18-14]–so here is the admission of MERS–it’s actually a three-part admission from interrogatories I propounded to MERS and signed by William Hultman:
“Interrogatory #4: MERS is only able to transfer what it actually holds and cannot transfer a negotiable instrument by virtue of a transfer of real property.
Interrogatory #7: Any language in the assignment which claimed to assign the note could not do so, as notes do not move through assignments in the land records.
Interrogatory #13: The MERS assignment can only assign the interest that MERS is holding. When MERS is named as the beneficiary, it holds legal title to the Deed of Trust and can assign the Deed of Trust. Unless MERS is the note holder it cannot transfer the note since the note moves through endorsement and delivery pursuant to the Uniform Commercial Code.”
These interrogatories can be read and downloaded here: MERS INTERROGATORIES
Do you see the pattern? MERS has no control over the note and openly admits it. MERS still perversely claims to have control of the deed of trust/mortgage, but this is impossible if they don’t have control of the note, since the note and mortgage are inseparable AND the note is the greater of the two; the mortgage is worthless without the note. Therefore, MERS cannot legally assign the deed of trust/mortgage because MERS has no control of the note, and openly admits to having no control over the note.
The Chhun decision is great news to be sure, but decisions like it should have been legion over the past five years or so; instead such decisions have been the vast minority. Hopefully Chhun will have a snowball, snowpocalypse effect on MERS and foreclosure fraud…
IMPORTANT NOTE/DISCLAIMER: The above article is not and should not be construed as legal advice and was not written by an attorney. It is merely a collection of common-sense, rational observations written by a sane, rational layperson with common sense. It is recommended that you consult with an attorney for any and all legal advice and/or action.