U. S. Supreme Court Declines to Review MERS Challenge
By: Krista Franks 10/12/2011
The United States Supreme Court has denied a writ of certiorari in a case involving MERS, refusing to reconsider a California court ruling, which upheld MERS’ right to initiate foreclosures.
The Supreme Court of the State of California previously refused to review the case, leading San Diego foreclosure attorney Ehud Gersten to elevate his client’s case to the U.S. Supreme Court.
“It is disappointing,” Gersten told DSNews.com Wednesday. However, Gersten noted that the odds the case would be heard were very slim. Only about 3 percent of cases submitted are granted review by the Supreme Court, he said.
Still, he had hoped the Supreme Court would make a national ruling, ending the state-by-state discrepancies in MERS cases. “One of the things that’s disappointing about it is that it would be nice to have a decision for the entire country,” Gersten said.
The case in question, Gomes v. Countrywide, was originally decided by Judge Steven R. Denton, who ruled that the language in the deed of trust allows MERSto initiate non-judicial foreclosure actions and that the borrower concedes this right to MERS when he or she signs the deed of trust.
“Courts in California have ruled consistently that MERS’ legal standing as beneficiary gives MERS the authority under state law to take action on behalf of the owner of the note,” said Janis Smith, MERSCORP’s VP of corporate communications in a statement announcing the Supreme Court’s denial of the case.
She added that Gomes’ claim “lacks merit” and that “[a]s stated in the deed of trust, Gomes agreed by executing that document that MERS has the authority to initiate a foreclosure.”
“The MERS business model has been upheld by numerous courts around the country, and is operating in all 50 states,” Smith added.
However, MERS issued a policy update in July stating that MERS will no long initiate foreclosure actions.
Gersten believes MERS’ foreclosure actions were not legal and it “does away with land laws” when initiating foreclosure actions. When a homeowner faces foreclosure, he or she should at least know who is filing the foreclosure “and who has a legal right to foreclose,” he stated.
Gersten also pointed out that Chief Justice John Roberts recused himself of the Gomes v. Countrywide. “It would be nice to know why because it doesn’t normally happen,” Gersten said.