21 Sep Landmark Decision Creates Foreclosure Defense in Kansas
The Kansas Supreme Court ruled in Landmark National Bank v. Kesler, 2009 Kan. LEXIS 834, that MERS, a company designated as nominee on millions of real estate security instruments, has no standing and can not initiate or maintain an action to foreclose a defaulted loan. A private company, MERS was created by a combination of banks and government sponsored enterprises to facilitate electronic registration and transfer of real estate instruments. The name MERS, an acronym for Mortgage Electronic Registration Systems, describes the reason for its creation and its limitation as an entity.
This is another nail in the coffin for MERS. Beginning in Florida, with similar cases in Ohio and New York, courts around the country are rejecting MERS as a real party in interest before the court. In a recent Washington bankruptcy court case, the judge was particularly blunt about his rejection of MERS.
While this case is not truly a “Landmark” for the country, as a determination by the highest court in Kansas, it is the law of the land in that state. Complex trusts administered by giant banks have been hiding behind MERS as owners of bundled home loans inaggregationsare called “collateralized debt obligations”. Perhaps the LandmarkNational Bank caseis another steptoward dispatching the nameless and faceless financial institutions takiing homes from working families across the country. The same banks who just can not seem to find a way to modify the loans so that borrowers can keep a roof over their heads.
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