Publication
Financial Services Litigation Bulletin-April 2010
Around the country, distressed borrowers are filing suit in an attempt to delay or avoid nonjudicial foreclosure of their residential mortgages. These borrowers' tactics include assailing the secondary market for mortgage obligations. In one common stratagem, they allege that their deeds of trust may not be enforced because the deeds of trust name a facilitator of the secondary market, Mortgage Electronic Registration Systems Inc. ("MERS"), as a nominee of the lender and beneficiary. To date, federal and state courts have uniformly rejected the contention that naming MERS on a deed of trust impairs the security interest. While foreclosing parties are sometimes required to present evidence of their entitlement to foreclose under a MERS deed of trust, these burdens do not arise in the typical nonjudicial foreclosure context. A new decision out of the District of Nevada does not upset these conclusions, but would require presentation of evidence unless MERS follows a specific foreclosure procedure.
About Snell & Wilmer
Founded in 1938, Snell & Wilmer is a full-service business law firm with more than 500 attorneys practicing in 16 locations throughout the United States and in Mexico, including Los Angeles, Orange County and San Diego, California; Phoenix and Tucson, Arizona; Denver, Colorado; Washington, D.C.; Boise, Idaho; Las Vegas and Reno, Nevada; Albuquerque, New Mexico; Portland, Oregon; Dallas, Texas; Salt Lake City, Utah; Seattle, Washington; and Los Cabos, Mexico. The firm represents clients ranging from large, publicly traded corporations to small businesses, individuals and entrepreneurs. For more information, visit swlaw.com.
