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Financial Services Law Insights and Observations

Nevada Supreme Court Rules MERS Mortgage Assignments Are Valid

Foreclosure Mortgage Servicing


On February 24, the Nevada Supreme Court held, in two separate cases, that a Mortgage Electronic Registration System (MERS)-generated mortgage assignment did not invalidate a foreclosure. Davis v. U.S. Bank, N.A., No. 56306, 2012 WL 642544 (Nev. Feb. 24, 2012); Volkes v. BAC Home Loans Servicing, No. 57304, 2012 WL 642673 (Nev. Feb. 24, 2012). In both cases, the court upheld the lower courts’ decisions allowing foreclosure certificates to be issued following unsuccessful foreclosure mediation. Appellants had argued that MERS is a sham entity, and therefore any MERS-generated assignments are necessarily invalid. Noting that courts in Nevada and other states have “repeatedly” recognized that MERS serves a legitimate business purpose, the Nevada Supreme Court rejected appellants’ arguments that their assignments were invalid merely because they were generated by MERS.