KABOOM!!! Bank of America v. Greenleaf | Maine SUP. CT - MERS does not have the power to assign a mortgage in Maine

MERS Macerated in Maine Yet Again by Their NEMESIS, Tom Cox, ESQ

  MAINE SUPREME JUDICIAL COURT Reporter of Decisions Decision: 2014 ME 89 Docket: Cum-13-536 Argued: May 14, 2014 Decided: July 3, 2014 Panel: ALEXANDER, SILVER, MEAD, GORMAN, and JABAR, JJ. BANK OF AMERICA, N.A. v. SCOTT A. GREENLEAF et al. EXCERPT: [¶13] Here, in an attempt to establish its ownership of Greenleaf’s mortgage, the Bank offered and the court admitted the original mortgage, a mortgage assignment, and a certification of a merger. The first of these documents establishes that the Greenleafs executed a mortgage on November 30, 2006, naming RMS as the lender and MERS as the lender’s nominee. In the second document, which is dated April 23, 2011, and signed by Aida Duenas, “assistant secretary,” MERS purports to assign the Greenleaf mortgage to BAC. To explain why this 2011 assignment fails to support the Bank’s claim that it owns the mortgage, we return to the language in the 2006 mortgage. In its definitional section, the mortgage states:

(C) “MERS” is Mortgage Electronic Registration Systems, Inc. MERS is a separate corporation that is acting solely as a nominee for Lender and Lender’s successors and assigns. MERS is organized and existing under the laws of Delaware, and has an address and telephone number of P.O. Box 2026, Flint, MI 48501-2026, tel. (888) 679-MERS. FOR PURPOSES OF RECORDING THIS MORTGAGE, MERS IS THE MORTGAGEE OF RECORD. (D) “Lender” means RESIDENTIAL MORTGAGE SERVICES, INC . . . . [Borrowers] mortgage, grant and convey the Property to MERS (solely as nominee for Lender and Lender’s successors and assigns), with mortgage covenants, subject to the terms of this Security Instrument, to have and to hold all of the Property to MERS (solely as nominee for Lender and Lender’s successors and assigns) and to its successors and assigns, forever. . . . [Borrowers] understand and agree that MERS holds only legal title to the rights granted by [Borrowers] in this Security Instrument, but, if necessary to comply with law or custom, MERS (as nominee for Lender and Lender’s successors and assigns) has the right: (A) to exercise any or all of those rights, including, but not limited to, the right to foreclose and sell the Property; and (B) to take any action required of Lender including, but not limited to, releasing and canceling this Security Instrument. . . . . [Borrowers] grant and mortgage to MERS (solely as nominee for Lender and Lender’s successors in interests) the Property described [below].

[¶14] We have already analyzed this exact language in Saunders, 2010 ME 79, ¶ 9, 2 A.3d 289. We concluded that, notwithstanding its reference to MERS as the “mortgagee of record,” the mortgage in fact granted to MERS “only the right to record the mortgage” as the lender’s nominee, and “having only that right, MERS [did] not qualify as a mortgagee pursuant to our foreclosure statute.”10 Id. ¶¶ 10-11 (quotation marks omitted). [¶15] As in Saunders, despite the language in Greenleaf’s mortgage that suggests otherwise, Greenleaf’s mortgage did not, as a matter of law, grant to MERS any right to foreclose on the property. Rather, the mortgage conveyed to MERS only the right to record the mortgage as nominee for the lender, RMS. There is also no evidence in the record purporting to demonstrate that MERS acquired any authority with respect to Greenleaf’s mortgage by any means other than that defined in the mortgage itself. [¶16] When MERS then assigned its interest in the mortgage to BAC, it granted to BAC only what MERS possessed—the right to record the mortgage as nominee—because MERS could not have granted to another person or entity any greater interest in the mortgage than that enjoyed by MERS. See Sturtevant v. Town of Winthrop, 1999 ME 84, ¶ 11 n.4, 732 A.2d 264 (stating that “an assignee has no greater rights than his assignor”); Arey v. Hall, 81 Me. 17, 22, 16 A. 302 (1888) (“[T]he assignee can have no greater right . . . than the assignor.”). [...]