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Connecticut Supreme Court Confirms MERS Assignee Has Standing to Foreclose

December 13, 2011

On December 13, the Connecticut Supreme Court held that state law conferred standing on the holder of a promissory note to foreclose on a borrower and that a mortgage naming Mortgage Electronic Registration Systems, Inc. (MERS) mortgagee, as nominee of the original lender, was valid. RMS Residential Properties, Inc. v. Miller, No. SC 18746, 2011 WL 6033011 (Conn. Dec. 13, 2011). The borrower executed a promissory note to the lender and conveyed a mortgage deed to MERS as nominee of the lender. After the borrower failed to make a single payment, the mortgage was assigned to the plaintiff RMS, which also became holder of the promissory note before it commenced the foreclosure action. In affirming the trial court’s grant of summary judgment in favor of the plaintiff, the Court rejected the borrower’s argument that the plaintiff lacked standing as a mere holder of the note. The Court also rejected the borrower’s contention that the mortgage was void because MERS was not the original lender or the party secured by the mortgage. The Court found that the mortgage made clear that the lender named MERS mortgagee and that to hold such mortgages void would frustrate the intentions of both mortgagors and mortgagees.