InfoBytes, September 23, 2011 - A Weekly In-depth review of news & developments in the financial services industry


Topics In This Issue:

• Federal Issues

• Courts

• Miscellany

• Firm News

• Mortgages

• Banking

• Consumer Finance

• Litigation

• E-Financial Services

• Privacy/Data Security

Excerpt from Mortgages:

Alabama Supreme Court Affirms Judgment for MERS in Wrongful Foreclosure Action. On September 9, the Supreme Court of Alabama affirmed without opinion an order granting summary judgment to the Mortgage Electronic Registration System, Inc. (MERS) and its corporate parent in an action alleging that MERS lacked standing to foreclose. Henderson v. Merscorp., Inc. et al., No. 1091716 (Ala. Sept. 9, 2011), aff'g No. 08-CV-900805 (Ala. Cir. Ct. May 6, 2010). Following her default and the initiation of foreclosure proceedings by MERS, the borrower sued, alleging that MERS lacked the "present legal right to enforce" the mortgage. Plaintiff's complaint included claims for wrongful foreclosure, negligence, wantonness, and unjust enrichment. MERS moved for summary judgment, arguing that it had standing to foreclose because MERS is the mortgagee as nominee for the Lender and MERS holds the legal title to the note and mortgage. MERS' attorney held physical possession of the note for MERS, an d the note endorsed in blank. MERS also moved to dismiss plaintiff's claims for negligence, wantonness, and unjust enrichment because MERS was not the servicer of the loan and was not responsible for collection, distribution, or application of plaintiff's mortgage payments. Additionally, MERS argued that plaintiff's wrongful foreclosure claim should be dismissed because no foreclosure sale had occurred or was scheduled, even though plaintiff had defaulted. The trial court granted MERS' motion for summary judgment and dismissed the case. On plaintiff's appeal, the Alabama Supreme Court affirmed the trial court without opinion.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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