COUNCIL BLUFFS, Iowa (Legal Newsline) -- In a ruling last month, an Iowa district court judge said MERS, the national mortgage registry, is entitled to receive a notice of the right to redeem.
Under Iowa law, service of such a notice "shall be made by both regular mail and certified mail on any mortgagee having a lien upon the parcel... and any other person who has an interest of record, at the person's last known address."
In Flagstar Bank FSB v. Lone Pine Capital LLC, petitioner Flagstar, as assignee by an assignment of the mortgage from MERS and now mortgagee, filed a claim that the notice of right to redeem was not properly sent to all parties in that it was not sent to the then-mortgagee MERS.
In his 11-page order, Judge James S. Heckerman of the state's Fourth Judicial District granted summary judgment to the plaintiff.
The judge said he is "persuaded by the Iowa law, both statutory and case law," and believes MERS was entitled to receive the notice, both as a mortgagee and as a person having an interest of record.
The Iowa statute, he said, created an "independent constitutional right to notice of the tax sale."
"The plain terms [of the statute] grants MERS the right to notice of tax sales that may deprive MERS of its interest in property," the judge wrote. "Having given that statutory right to MERS, the state may not deprive MERS of its benefits."
Janis Smith, MERSCORP Holdings vice president for corporate communications, said Tuesday the ruling "plainly supports" the registry's interests and rights as the "mortgagee and nominee for the lender and the lender's successors and assigns."
MERSCORP and Mortgage Electronic Registration Systems Inc. were formed in 1995 to facilitate the growing mortgage finance market.
The privately-held electronic registry is designed to track servicing rights and ownership of mortgage loans in the United States.
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