First Circuit supports MERS
The First Circuit reaffirmed its view of the validity of the MERS system under Massachusetts law. Mills v. U.S. Bank, (1st Cir. 2014) (reaffirming Culhane v. Aurora Loan Services of Nebraska, 708 F.3d 282 (1st Cir.2013)). The court explained that there was no conflict between MERS’s role as the “mortgagee” and MERS’s role as the nominee (agent) for the mortgagee (the actual Lender to whom promises were made under the note). Thus the note could be transferred from bank to bank while MERS held “legal title” to the mortgage, giving MERS the power to transfer legal title to the final note holder to allow it to foreclose on the property after default by the mortgagor. According to the court the “MERS framework…separates the legal interest [in the mortgage] from the beneficial interest [in the underlying debt]” and is valid. This separation is valid under Massachusetts law which allows the note to be …
