Is The End Near For MERS Litigation In Rhode Island?

On September 25, 2014, after years of litigation on the role, authority, and legal standing of Mortgage Electronic Registration Systems, Inc. (MERS) to act on behalf of the mortgagee, the Rhode Island Supreme Court issued 10 orders, each dismissing Plaintiffs' appeals from a Rhode Island Superior Court judgment in favor of MERS without further briefing and argument and relying extensively on prior 2013 and 2014 decisions. The Court's summary disposition of these 10 appeals, which were before the Court at a conference in session, sends a strong message that MERS litigation in Rhode Island is coming to an end.

The Court's orders recited and rejected three main undercurrent arguments by Plaintiffs. First, Plaintiffs contended Rhode Island law precludes MERS from acting in a nominee capacity for the lender. Second, Plaintiffs contended that MERS lacked the authority to assign their mortgages, and the subsequent foreclosures were void for the same reason. Third, Plaintiffs claimed that the MERS assignments were void because they were signed by persons without authority to do so, and that an affidavit from a corporate officer of the mortgage servicer presented in support of the summary judgment motion was inadmissible. Each of these arguments and the Court's reasons for summary dismissal are detailed below.

MERS Status As a Nominee Is Recognized Under Rhode Island Law

The Plaintiffs challenged MERS' role as mortgagee, contending Rhode Island law precluded MERS from acting in a nominee capacity and exercising the power of sale on behalf of the lender. The Rhode Island Supreme Court, relying on Bucci v. Lehman Brothers Bank FSB, 68 A.3d 1069, 1085-89 (R.I. 2013) and Ingram v. Mortgage Electronic Registration Systems, Inc., 94 A.3d 523, 528 (R.I. 2014) summarily rejected this argument and affirmed MERS' authority to exercise the power of sale. Specifically, the Court relied on Bucci, finding that Rhode Island law permits MERS, as the holder of legal title to the mortgage and as agent of the lender, to exercise the statutory power of sale and right to foreclosure pursuant to the terms of the mortgage. Bucci, 68 A.3d at 1081. See also, Ingram, 94 A.3d at 528.

MERS Has the Right to Assign

Several of Plaintiffs also argued that MERS could not assign their mortgage(s) because MERS did not have the authority to enforce the obligation secured by the mortgage, and that as a result, the assignments and subsequent foreclosures were void. The Court summarily...