The Massachusetts Appeals Court has joined the U.S. Court of Appeals for the First Circuit in upholding the Mortgage Electronic Registration Systems, Inc. ("MERS") business model under Massachusetts law. Explicitly referencing the First Circuit's decision in Culhane v. Aurora Loan Services of Nebraska, 708 F.3d 282 (1st Cir. 2013), the Appeals Court in Sullivan v. Kondaur Capital Corp., 85 Mass.App.Ct. 202 (2014), held that mortgagors have standing to challenge an assignment of their mortgages, but only to the extent that such assignment is void, not merely voidable. Further, the Appeals Court found that the MERS system of mortgage assignments fully comports with Massachusetts law.
The United States Court of Appeals for the First Circuit has reaffirmed its prior holdings in Culhane v Aurora Loan Services of Nebraska, 708 F.3d 282 (1st Cir. 2013) and Woods v. Wells Fargo Bank, N.A., 733 F.3d 349 (1st Cir. 2013) regarding Mortgage Electronic Registration Systems, Inc.'s ("MERS") assignments of mortgages. The Court in Wilson v. HSBC Mortgage Services, Inc., 2014 WL 563457 (1st Cir. Feb. 14, 2014) found that while a plaintiff has standing to challenge a void assignment, they lack standing to challenge allegedly voidable assignments, and the MERS system for assignments comports with Massachusetts law.
The First Circuit has held that, under Massachusetts law, a mortgagee's interest in a mortgage in default is inadequate to state a claim under the Massachusetts try title statute. The Plaintiffs in Lemelson, et al. v. U.S. Bank, N.A. filed suit under the Massachusetts try title statute, asserting that U.S. Bank's interest in the property as mortgagee constituted a adverse claim on their record title to the property.
Earlier this week, the Massachusetts Supreme Judicial Court (the "SJC") held that a plaintiff who is not a present mortgagee (or the mortgagee's agent) has no standing to bring an action under the Massachusetts Soldiers' and Sailors' Civil Relief Act for a determination that the named defendant is not entitled to the protections of the Federal Servicemembers Civil Relief Act (the "SCRA").