A pair of decisions from the Oregon Supreme Court will allow mortgage lenders to proceed with nonjudicial foreclosures in that state on loans that were placed into the Mortgage Electronic Registration Systems Inc. database. However, the foreclosure proceedings cannot be done in MERS’ name.
The court ruled that MERS cannot be considered a beneficiary under the Oregon Trust Deed Act because it is not the entity to which obligation is owed to. Only the beneficiary can institute a nonjudicial foreclosure proceeding.
In its ruling in Brandrup v. Recontrust Co., the court said, “The power to transfer the beneficial interest in a trust deed or to foreclose it follows the beneficial interest in the trust deed. The beneficiary or its successor in interest holds those rights. MERS' authority, if any, to perform any act in the foreclosure process therefore must derive from the original beneficiary and its successors in interest. We are unable to determine the existence, scope, or extent of any such authority on the record before us.”
The ruling in the second case,
The original decision in Niday was a summary judgment for the lender and MERS; that was overturned by an appellate court. This ruling upheld the appellate court decision and it has been sent back to the lower court which made that ruling.
In a press release, MERS said it views the opinions as consistent with its role and authority to act on behalf of lenders in Oregon. It said it is confident that it has and it can prove it has the authority to act on behalf of the beneficiaries of the deed of trust.
“The court also held that Oregon’s nonjudicial foreclosure statute does not require recordation of assignments’ of the trust deed by operation of law that result from the transfer of the secured obligation.’ These rulings will allow lenders to move forward with nonjudicial foreclosure proceedings in the state,” the MERS release continued.
