Superior Court of Pennsylvania Upholds MERS Authority to Act as Mortgagee
June 23, 2016
The Superior Court of Pennsylvania on June 13 affirmed the trial court’s order granting summary judgment in favor of MERSCORP Holding.
In Marjer v. Poplawski, the appellant purchased property that was subject to a prior, unsatisfied mortgage with MERS as the mortgagee given by the prior owner. After purchasing the property, the appellant immediately filed a quiet title action alleging the deed to the property divested any claims MERS had in the property.
The trial court entered summary judgment in MERS’ favor, finding the appellant’s interest was subject to the mortgage because the appellant could not produce any evidence that the mortgage had been paid off at the time the appellant purchased the property. On appeal, the Superior Court found the trial court had failed to address the appellant’s standing arguments that MERS’ nominee interest was insufficient to give MERS standing to defend the lawsuit and remanded the matter back to the trial court to consider this issue. The trial court again affirmed the priority of MERS’ mortgage and held that MERS had standing to defend the action.
In a second appeal, the appellant again argued that MERS lacked standing to defend the lawsuit. This time, the Superior Court found the appellant’s argument that the party it named in a lawsuit lacked standing to defend the same lawsuit “peculiar” and “perplexing.” Instead, the appellant focused their argument not on the issue appealed, but on MERS’ authority to assign the underlying mortgage.
Nevertheless, citing to its decision in Bank of America v. Gibson, the Court stated that it had “expressly held that MERS, as holder of legal title to the interests granted by the mortgagor in the mortgage, clearly has authority to assign the mortgage.” Further, the Court found that the standing argument made by the appellant was “a manufactured controversy” that was “patently baseless” and, citing to the language of the mortgage, as well as its prior decision in MERS v. Ralich, the Court found MERS’ authority under the mortgage “clearly encompasses MERS’ ability to defend its interests in this quiet title action.”
“Courts in Pennsylvania continue to emphasize prior holdings that recognize MERS’ authority to act as mortgagee under Pennsylvania law,” said Janis Smith, MERSCORP vice president for corporate communications. “MERS has authority to act on behalf of the lender; this authority is granted by plain language in the mortgage document signed at closing by the borrower.”
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