This allows banks to more easily transfer loans among them without creating a new assignment each time.You may have a defense against a foreclosure action if MERS is listed as the owner of the mortgage.
Nonetheless, the Fifth Circuit rejected the plaintiffs’ argument that MERS could not act as a beneficiary of the deed of trust, holding that Texas law granted MERS this authority and the deed of trust itself explicitly designates MERS as the beneficiary.
Accordingly, the Court held, “MERS had the right to assign the [deed of trust].” Next, the Fifth Circuit rejected the plaintiffs’ contention that the assignment of the deed of trust was void under New York law for violating the PSA.
This is because collection efforts hinge on owning the promissory note.
If the foreclosing party cannot produce the promissory note, the homeowner will have a defense to the foreclosure.
If MERS is the current assignee, it cannot pursue a foreclosure because it does not have an interest in the promissory note.