The First Circuit Strikes Again in Culhane v. Aurora Servicing! MERS System Passes Legal Muster But Borrowers Granted Standing to Challenge Mortgage Assignments

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For the second time in a week, the U.S. Court of Appeals for the First Circuit has issued a major foreclosure opinion, this one in Culhane v. Aurora Loan Servicing of Nebraska, No. 12-1285. Writing for a distinguished panel which included retired U.S. Supreme Court Justice David Souter, Circuit Judge Bruce Seyla held that the MERS system passes legal muster, but — overruling numerous lower court decisions to the contrary — gave borrowers the right to challenge mortgage assignments in the wrongful foreclosure setting. In my opinion, the net effect of this decision will put to rest the ubiquitous challenges to the MERS regime in Massachusetts, yet could result in a slight uptick in foreclosure challenges by blessing borrowers with much sought after legal standing to challenge faulty mortgage assignments.

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