Robinson v. American Home Mortgage Servicing, Inc. (In re Mortgage Electronic Registration Systems, Inc.)., __F/3d__, 2014 WL 2611314 (9th Cir. 6/12/14)

By Los Angeles Bankruptcy Attorney on June 13, 2014

On June 12, 2014, the 9th Circuit Court of Appeals issued its decision in). This decision is the result of multi-district litigation related to the operation of the MERS System and, with one exception, found in favor of the lenders on state law claims, such as, wrongful foreclosure, predatory lending, etc. The decision provides a good summary of the operation of the MERS System and prior case law on the topic. In this case, the 9th Circuit court of appeals held that:

1. the District Court did not improperly convert a motion to dismiss for failure to state a claim into a motion for summary judgment;
2. mortgagors’ challenge to MERS was not time-barred;
3. mortgagors had standing to bring false document claims against MERS;
4. mortgagors stated a false filing claim against MERS;
5. mortgagors could not bring wrongful foreclosure claims against MERS;
6. split between a note and deed of trust did not preclude nonjudicial foreclosure; and
7. the District Court did not abuse its discretion in denying mortgagors leave to amend their complaint.

Dismissed in part, affirmed in part, and reversed in part.