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Federal Judge Dismisses 72 Suits Against MERS

An Arizona federal judge dismissed 72 lawsuits against Mortgage Electronic Registration Systems Inc., which tracks ownership and servicing rights of U.S. mortgages.

U.S. District Judge James Teilborg, relying on a September appellate court decision, rejected the argument by plaintiffs in the consolidated litigation that naming MERS as a beneficiary on deeds of trust means they're unsecured and the properties can't be foreclosed.

"This court does not find legal support for the proposition that the MERS system of securitization is so inherently defective so as to render every MERS deed of trust completely unenforceable and unassignable," Teilborg wrote in his order dismissing the claims.

MERSCORP Inc., the parent company of MERS, hailed the ruling as a validation of its business model, which has survived attacks by plaintiffs lawyers in jurisdictions across the U.S., as dozens of states have ruled in the company's favor.

"The court's dismissal of these 72 cases against MERS, including six class actions, is an extremely significant ruling and shows that claims being made against MERS and MERSCORP alleging fraud, or that security interests are unenforceable, or alleging that foreclosures are inappropriate due to MERS’ presence as a party, are meritless," said MERSCORP in a statement.

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