Home Mortgage Alabama Supreme Court Upholds Lower Court’s Recognition of MERS’ Authority to Assign...

Alabama Supreme Court Upholds Lower Court’s Recognition of MERS’ Authority to Assign Mortgages

Reston, Virginia – May 16, 2013 – (RealEstateRama) — MERSCORP Holdings, Inc. today announced that a five-justice panel of the Alabama Supreme Court affirmed a lower court’s decision which in part validated MERS’ ability to assign mortgages as the nominee for the original lender and its successors and assigns.

MERSCORP in National News
MERSCORP in Social Media

In Federal National Mortgage Association v. Steele, Chief Justice Roy S. Moore, and Associate Justices Glen Murdock, Michael F. Bolin, James Allen Main and Tommy Bryan unanimously ruled without opinion that the lower court properly upheld Fannie Mae’s ejectment action judgment against the borrowers. MERS was not a party to the lawsuit.

The borrowers defaulted on their loan and after a completed non-judicial foreclosure and sale the foreclosing servicer conveyed title to the property to Fannie Mae. Fannie Mae received a judgment in its favor in the subsequent ejectment action and the borrowers sought to set aside the judgment. The borrowers claimed that the underlying foreclosure was invalid because Mortgage Electronic Registration Systems, Inc. (MERS) was not authorized to assign the mortgage to the servicer who conveyed title to the property to Fannie Mae after the foreclosure sale.

The trial court denied the borrowers’ request; affirmed Fannie Mae’s standing to bring the ejectment action and the judgment in favor of Fannie Mae. The trial court found that the borrowers’ claim regarding MERS’ lack of authority to assign the mortgage as “being contrary to Alabama law” because “[t]he ability of MERS to assign a mortgage or take other actions as the nominee for a lender and that lender’s assigns in a mortgage has been affirmed in Alabama.”

“The fact that MERS was named as the original mortgage… and subsequently executed an assignment of mortgage to Everhome Mortgage Company does not cause the judgment in favor of FNMA to be void,” Circuit Court Judge Eugene Verin wrote in the lower court ruling. The Alabama Supreme Court agreed and affirmed the lower court’s decision without opinion.

“The Alabama Supreme Court’s ruling leaves undisturbed MERS’ role as a mortgagee and its authority to assign a mortgage, which is consistent with other court rulings across the country,” MERSCORP Holdings Director of Corporate Communications Jason Lobo said.

For description of cases and other materials pertaining to MERS’ business model and role in U.S. housing, please visit www.mersinc.org.


MERSCORP Holdings, Inc. is a privately held corporation that owns and manages the MERS® System and all other MERS® products. It is a member-based organization made up of thousands of lenders, servicers, sub-servicers, investors and government institutions. Mortgage Electronic Registration Systems, Inc. (MERS) serves as the mortgagee in the land records for loans registered on the MERS® System, and is a nominee (or agent) for the owner of the promissory note. The MERS® System is a national electronic database that tracks changes in mortgage servicing and beneficial ownership interests in residential mortgage loans on behalf of its members.

Jason Lobo
Phone: 703.652.1660
Email: jasonl (at) mersinc (dot) org