Florida Ruling Invalidating MERS from Foreclosing
A Florida judge has stopped foreclosures performed by
a mortgage service provider after determining only mortgage note
owners, not assignees or authorized agents, are allowed to
Mortgage Electronic Registration Systems said it has
been halted from foreclosing, according to an announcement
As a result of the Aug. 18 ruling in the Sixth
Judicial Circuit Court in Pinellas County, MERS asked its members
to temporarily cease Florida foreclosure actions in its name, the
press release said.
"Our responsibility is to look out for the best
interests of our members," said R. K. Arnold, MERS president and
chief executive, in the announcement. "That means we want to help
them avoid additional costs and delays in Florida foreclosures
because of this ruling. So while the appeal is proceeding, we're
temporarily suspending foreclosures in the name of MERS in
Judge Walt Logan erroneously concluded that the
company does not have standing to act as a plaintiff in a mortgage
foreclosure suit if it is not the owner of the beneficial interest
in the note, said MERS, reportedly an assignee on deeds of trust
and mortgages recorded in the county land records.
"Florida has adopted the Uniform Commercial Code and
the applicable statutes do not require the beneficial owner of the
debt to be a party in the foreclosure suit," said Sharon Horstkamp,
MERS vice president and corporate counsel, in a written statement.
"MERS can have standing when MERS is the holder of the note on
behalf of the beneficial owner."
The judge reportedly challenged pleadings filed by
local foreclosure attorneys due to a lack of clarity regarding
ownership of the promissory note.
"It is an error by Judge Logan to deny MERS the
opportunity to amend the complaints in order to eliminate any
inconsistent allegations concerning ownership," MERS said in the
announcement. "Instead, Judge Logan categorically dismissed the
cases with prejudice to MERS based upon his inaccurate conclusion
that MERS cannot foreclose unless it actually owns the underlying
The electronic loan registry company advised its
members to prepare and execute assignments from MERS to an entity
designated by their investor.