Recent Utah Court Decisions re MERS
by Tom Cook
Three recent court cases in Utah regarding MERS have resulted in
contradictory decisions and are worthy of lender and servicer
Second case: A December 16, 2010 decision in
a case in Utah’s 4th District Court (a lower state court) reached
virtually the identical decision on mostly the same arguments by the
trustor. (Case No. 100403141; no further citation is available for a
Utah lower court decision). The following statements from the decision
define the court’s opinion of this type of action against MERS:
“The court concludes that MERS has standing to serve as
beneficiary and to appoint a successor trustee. The court further
concludes that the plaintiffs (trustor) consented to MERS as beneficiary
with the power to foreclose on the plaintiffs’
Third case: A case for quiet title was filed to clear title to a property with a recorded trust deed that named MERS as the beneficiary. The trustor purposely kept the loan current during the pendency of the litigation to avoid any unwanted documents, such as a substitution of trustee or notice of default, being recorded with the county recorder. The lawsuit named and served only the original lender and the original trustee on two recorded trust deeds. MERS, as the original beneficiary, was intentionally omitted as a party defendant. The attorney also had the ability to determine the entity to which the trustor was making payment and failed to name that party.
All served parties failed to answer or disavowed any ongoing interest in the property. The court entered default judgment and quieted title to the property in the plaintiff without ever having a hearing or questioning the list of defendants. The trustor sold the property clear of the trust deeds and thereafter stopped making payments. The extinguished senior trust deed has now been referred for foreclosure. The question is: what is left to foreclose? It appears that this action may result in protracted and costly litigation.
The attorney in this third case allegedly claims the same result in two other cases. Moreover, another attorney has apparently jumped on the band wagon, contending the same success in a similar case. Both purport to have a number of these cases pending and are obtaining many new clients for the same action. An article was published in the Salt Lake Tribune about these actions and MERS on January 15, 2011, and updated the next day. The newspaper’s website is accessible here; find the referenced article by using the search term “MERS.”
© Copyright 2011 USFN. All rights reserved.
625 The City Drive, Suite 310, Orange, CA 92868.
P (800) 635-6128 or (714) 838-7167 · F (714) 573-2650 · E firstname.lastname@example.org
Copyright © 2000- by USFN. All rights reserved.