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Standing to Challenge Tax Sale

November 04, 2014

Standing to Challenge Tax Sale

CaseMortgage Electronic Registration Systems, Inc. v. Carlton J. Ditto, et al

Issue:  Is MERS entitled to notice before the sale of a mortgage loan from one of its members?

Facts:  Plaintiff MERS provides an electronic registration system for tracking interests in mortgage loans for a fee to member lending institutions by being designated as a “beneficiary” or “nominee” on the deed of trust, allowing MERS members to sell mortgages to other MERS members without paying recording fees. MERS filed suit against Purchaser to invalidate his purchase of property because MERS had not received notice of the sale although it was listed as a beneficiary or nominee on the deed of trust.  The trial court refused to set aside the sale finding that MERS did not have an interest in the property and therefore was not entitled to notice of the sale.

Appellate Decision:  The intermediate court affirmed dismissal for lack of standing, finding that MERS was never given an independent interest in the property and suffered no injury.

Review Granted:  October 20, 2014.

Prediction:  David believes that the Court will affirm and join the other jurisdictions who have determined that MERS does not obtain an independent property interest in properties owned by its member lending institutions by being designated as a beneficiary or nominee on the deed of trust.