Chief Judge Ann Aiken for the U.S. District Court for the District of Oregon dismissed a borrower’s lawsuit against MERS and co-defendants, which had relief that the Court held was not justified under Oregon law.
In , the borrower, who was neither in default or facing foreclosure proceedings, sued the defendants seeking a judgment from the Court that the defendants possessed no security interest in his property and that the borrower was entitled to clear title to his property free of the MERS lien. In his complaint, the borrower alleged that none of the defendants possessed an interest in the borrower’s property because when the promissory note was sold by the original lender to the successor lender, none of the defendants recorded this transfer in the county land records.
Judge Aiken cited to the recent Oregon Court of Appeals decision in Niday v. GMAC Mortgage LLC and found that under Oregon law a transfer of the note automatically transfers possession of the security interest [the deed of trust] in the property to the subsequent note owner. Aiken dismissed all claims against the defendants, ruling that failure to record note transfers in the county land records “fails to articulate a legal basis to remove the DOT [Deed of Trust] from the Property or otherwise allege any wrongful conduct that is redressable by this Court.” Judge Aiken noted “plaintiff cannot sustain a claim for potentially wrongful non-judicial foreclosure based on MERS’ role as beneficiary.”