MERS is an organization that allows for the transfer of mortgages among its member banks without the need for a new recording in the applicable registry of deeds for each transfer. MERS typically appoints employees of its member banks as officers or secretaries of MERS, who then have the power to assign mortgages to other members, or from other members to themselves. Throughout any transfer, MERS remains the mortgagee of record for the benefit of the member bank currently holding the note that the given mortgage secures.
In 2013, Connecticut increased the fees for recording of MERS’s mortgages from $53 for the first page and $5 for each additional page (the cost for others to record mortgages) to $159 for the first page and $5 for each additional page. MERS sued the state, alleging that the fee increase impermissibly interfered with interstate commerce and violated the due process and equal protection clauses of the state and U.S. Constitution.
The state Supreme Court disagreed, finding that the fee increase was rationally related to a legitimate government purpose, raising revenue. The Supreme Court also noted that, given MERS’s cost savings in not recording transfers of mortgages, imposing higher fees on MERS at the outset was not unfair. Finally, MERS failed to show a burden on interstate commerce, as MERS demonstrated no loss of business.
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