This has to be one of the best ruling out of Florida involving MERS.




CASE NO.: 09-142-CA

Some Excerpts…
Emphasis added by me

“While U.S. Bank alleged in its unverified complaint that it was the holder of the note and mortgage, the copy of the mortgage attached to the complaint lists ‘Fremont Investment & Loan’ as the ‘lender’ and ‘MERS’ as the ‘mortgagee.’ When exhibits are attached to a complaint, the contents of the exhibit control over the allegations of the complaint … Because the exhibit to U.S. Bank’s complaint conflicts with its allegations concerning standing and the exhibit does not show that U.S. Bank has standing to foreclose the mortgage, U.S. Bank did not establish its entitlement to foreclose the mortgage as a matter of law. Moreover, while U.S. Bank subsequently filed the original note, the note does not identify U.S. Bank as the lender or holder.” BAC Funding Consortium Inc. v. Jean-Jacques, 2010 WL 476641 (Fla. 2nd DCA 2010).

Likewise, a copy of the mortgage and two riders are attached to the complaint in the instant case. A copy of the mortgage, two riders, the note, and an addendum are attached to the amended complaint. The original note has also been filed. Every one of these exhibits and the original note identify an entity other than Plaintiff as “lender.” The mortgage identifies an entity other than Plaintiff as “grantee.” None of the documents identify Plaintiff as “holder.” Moreover, the language in these exhibits, including the note, indicates that Plaintiff does not have standing, and that language controls over contrary allegations contained in the complaint. Further, there are two endorsements on the note, each to a specific entity other than Plaintiff. Therefore, possession of the original note, in and of itself, does not vest Plaintiff with standing. Rather, Plaintiff must necessarily rely upon a valid assignment, which does not exist.


The assignment attached to the amended complaint is from Mortgage Electronic Registration Systems, Inc. (hereinafter “MERS”) to Plaintiff, and that assignment is completely ineffective. As nominee for the lender, MERS serves in a very limited capacity. Specitically, MERS records the mortgage and tracks ownership ofthe lien. MERS has no substantive rights itself and, therefore, cannot assign what it does not have. “A nominee of the owner of the note and mortgage may not effectively assign the note and mortgage to another for want of an ownership interest in said note and mortgage by the nominee.” LaSalle Bank Nat. Ass’n v. Lamy, 824 N.Y.S.2d 769, 2006 WL 2251721 (Sup.2006).

When a state agency found that MERS is a mortgage banker subject to license and registration requirements, MERS appealed to the Supreme Court of Nebraska and outlined its very limited role as nominee. “Subsequently, counsel for MERS explained that MERS does not take applications, underwrite loans, make decisions on whether to extend credit, collect mortgage payments, hold escrows for taxes and insurance, or provide any loan servicing functions whatsoever. MERS merely tracks the ownership of the lien and is paid for its services through membership fees charged to its members.” Mortgage Electronic Registration Systems, Inc. v. Nebraska Department of Banking and Finance, 704 N. W.2d 784 (Neb.2005). “MERS argues that it does not acquire mortgage loans and … only holds legal title to members’ mortgages in a nominee capacity and is contractually prohibited from exercising any rights with respect to the mortgages (i.e., foreclosure) without the authorization of the members. Further, MERS argues that it does not own the promissory notes secured by the mortgages and has no right to payments made on the notes.” Id. Emphasis added. “Documents offered during the Department hearing support the limited nature of MERS’ services.” [d. Based on the explanation from MERS itself and documents presented by MERS and reviewed by the Supreme Court of Nebraska, it is undisputed that MERS serves in a very limited capacity and holds no substantive rights. MERS is contractually prohibited from exercising any rights in a foreclosure case without the authorization of the lender, and that prohibition was confirmed by MERS itself. There is no evidence of any such authorization in the instant case.

Other courts around the country have likewise recognized the limited role that MERS plays as nominee. “We specifically reject the notion that MERS may act on its own, independent of the direction of the specific lender who holds the repayment interest in the security instrument at the time MERS purports to act. .. Nothing in the record shows that MERS had authority to act.” Mortgage Electronic Registration Systems. Inc. v. Southwest Homes of Arkansas, 2009 WL 723182 (Supreme Court of Arkansas, 2009). “MERS’s role in this transaction casts no light on the contractual issues raised in this case.” Id. “The relationship that MERS has to Sovereign is more akin to that of a straw man than to a party possessing all the rights given a buyer.” Landmark National Bank v. Kesler, 216 P.3d 158 (Supreme Court of Kansas, 2009). “MERS presents no evidence as to who owns the note, or of any authorization to act on behalf of the present owner.” In Re Vargas, 396 B.R. 511 (Bankr.C.D.Cal. 2008). “As noted above, MERS purportedly assigned both the deed of trust and the promissory note to Consumer … however, there is no evidence of record that establishes that MERS either held the promissory note or was given the authority by New Century to assign the note … Accordingly, the Court concludes that there is insufficient evidence that Consumer has standing to proceed with this litigation.” Saxon Mortgage Services, Inc. v. Hillery, 2008 WL 5170180 (N.D.Cal. 2008).

Not only are there substantive deficiencies with an assignment from MERS, but the instant assignment was also untimely. The complaint was filed on January 7, 2009 and states, “The Plaintiff owns and holds the note and mortgage.” Complaint ~5. However, the assignment was not executed until May 20, 2009 – more than four months after the complaint was filed. Asstated above, there is no indication on the assignment that the note and mortgage were physically transferred prior to that date. “[T]he plaintiffs lack of standing at the inception of the case is not a defect that may be cured by the acquisition of standing after the case is tiled.” Progressive Exp. Ins. Co. v. McGrath Community Chiropractic, 913 So.2d 1281 (Fla. 2nd DCA 2005). “If on the date the Provider tiled the original statement of claim Mr. Joseph had not assigned benefits to the provider, only Mr. Joseph had standing to bring the action. It follows that the Provider would have lacked standing under these circumstances, and the case should have been dismissed.” Id.

There is no evidence of record that establishes that MERS was authorized to assign anything to Plaintiff, and therefore, the assignment was invalid. Even if the assignment were valid, it was not executed until after the complaint was filed. Therefore, Plaintiff s standing at the inception of the case was based entirely on the complaint and the exhibits attached thereto. It appears on the face of those exhibits that an entity other than Plaintiff has standing, and those exhibits control over contrary allegations contained in either version of the complaint. Plaintiff lacks standing now based on the substantive deficiencies with an assignment from MERS. Plaintiff lacked standing at the inception of the case based on those substantive deficiencies and the timing of the execution of the assignment. Absent standing, there is no justiciable controversy between the parties, and this case must be dismissed.
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It is therefore ORDERED AND ADJUDGED that Defendant’s motion is granted, and this case is hereby dismissed.

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