Revenge of the Clerks: MERS Confronts County Clerk and Qui Tam Lawsuits

By Dustin A. Zacks

ike a movie that refuses to end, Mortgage Electronic Registration Systems, Inc. (MERS) has continued to generate controversy and litigation long after its beginning. This previously obscure mortgage registry tracks the ownership of over half of the nations home loans and has become notorious since the housing crisis began.1 Homeowners began the legal assault on MERS by challenging its right to initiate foreclosure proceedings. Now, MERS faces another wave of legal challenges: county clerks and private qui tam actions assert that MERS has cheated county recorders out of millions of dollars in recording fees. This latest chapter in the tortuous chronicles of MERS represents yet another opportunity for homeowners, litigators, and legislators to consider the direction of recording practices nationwide. Before MERS was created, transfers in the ownership of home loans had to be recorded at county registrars, clerks, and recorders offices. This process was costly in terms of fees, wasted time, and accuracy. To bypass this process, the nations largest lenders and the government sponsored entities created MERSan electronic registry designed to track transfers in ownership of home loans. MERS is now listed on millions of home loans as either the mortgagee or as the beneficiary on deeds of trust. At the same time, mortgage language lists MERS interest as existing solely as nominee for the true or beneficial owner of the loan. In practical terms, this means that MERS remains listed as the mortgagee in the public records regardless of whether the underlying interest in the amount owed has been transferred. MERS continues to act as nominee for subsequent owners of the home loan, as long as those transferees are members of MERS, and any such transfers are

tracked in MERS private computerized database. The end result is that MERS eliminated the necessity for lenders to create and record assignments of mortages which would have previously been generated upon sale of a home loan. Instead, assignments are only produced when the loan is transferred to a non-MERS member bank or investor, or when an assignment is necessary to initiate foreclosure proceedings. The time and cost savings were partly designed to ease the process of securitizing home loans. Ordinarily, the securitization process would have required several assignments to be produced and recorded. Lenders have now eliminated the resource drain those assignments represented. For its part, MERS generates a fee each time a lender registers a loan on its system, and claims that the cost savings from not having to record each assignment results in savings for homeowners. Yet once the housing collapse began, MERS was forced to confront legal challenges. Homeowner Challenges in Foreclosure Litigation MERS first gained infamy on the national stage when foreclosure numbers exploded during the housing crisis. Many foreclosures were initiated in the name of MERS, resulting in puzzled homeowners and attorneys asking basic questions about the company and mounting legal challenges. Homeowners and their attorneys propounded a wide variety of legal arguments challenging MERS right to foreclose. Ultimately, most jurisdictions have recognized MERS ability to foreclose on behalf of the beneficial owner of a loan.2 This is presumably due to the varied language used by MERS in mortgages and deeds of trust. In courts of various jurisdictions, MERS has successfully argued that it is either mortgagee, beneficiary, nominee, agent, holder, or even the owner of home loans. Thus, most homeowners advocates fighting MERS-initiated foreclosures have played a game of legal whack-a-mole, whereby an argument that, say,
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Dustin A. Zacks is a founding member of King, Nieves & Zacks in West Palm Beach, where his practice concentrates on real estate litigation. Volume 32 Number 1 January 2013

Electronic copy available at: http://ssrn.com/abstract=2227789

MERS cannot foreclose because it is not a true mortgagee, is disregarded because a court finds that MERS can represent the true owner as an agent. Furthermore, even when homeowners have mounted successful challenges to MERS-intitiated foreclosures, banks and MERS simply changed tactics. After losing some notable cases in 2011, for example, MERS announced that it will cease foreclosing in its own name.3 Henceforth, homeowners facing foreclosure will have to find other ways to challenge MERS-related foreclosures, such as questioning the validity of MERS assignments. These challenges in the midst of foreclosure litigation are not going away. The long delay home foreclosures face in resource-strapped jurisdictions means that MERS may have innumerable foreclosures in its own name still pending in courts around the country. Furthermore, MERS continues to appear on documents, such as assignments, that are routinely submitted as evidence in foreclosure litigation, meaning that MERS will continue to face questions about its role in evicting homeowners. Given that many homeowners and judges are still relatively uninformed about MERS, it behooves litigators to avail themselves of both sides of the legal arguments surrounding MERS in foreclosures. The New Challenge to MERS: County Clerk Lawsuits Just when the controversy regarding MERS largely seemed to recede, county clerks have dragged it back onto the national stage. Now, rather than facing its most important hurdles in foreclosure litigation, it appears that the most imminent legal threat to MERS is the spate of lawsuits filed by county clerks. All across the nation, county clerks and recorders are suing MERS for large sums, sometimes seeking class-action status, to seek money the clerks claim has been wrongfully withheld. At their core, these lawsuits reflect a most basic, even elemental, conflict between MERS and county recorders: on one hand, MERS was created specifically to avoid having to pay clerks fees for assignments, and MERS does not believe it is required to record any assignment between MERS members. On the other hand, clerks assert that MERS has effectively usurped
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the public recorders offices and is required to record and pay forall the assignments it avoided recording in past years. Each of the arguments against MERS in these clerks lawsuits will be examined in turn. Claim One: State Laws Required All Assignments to be Recorded Common to most clerk lawsuits is their assertion that all changes in beneficial ownership of home loans are required to be recorded in the public records.4 This point necessitates some explanation. As briefly mentioned above, MERS was expressly created to avoid recording every single change in ownership. Thus, before the onset of MERS, a sale of a mortgage loan would result in production of an assignment of mortgage that would typically need to be recorded for a fee. In a mortgage listing MERS as the mortgagee (deemed a MERS Originated Mortgage, or a MOM), by contrast, MERS will remain listed in the public records no matter how many times the underlying interest in the loan is transferred. Thus, in the case of a mortgagebacked securitization, the fact that the actual owner of the right to enforce the loan might have changed hands several times as part of the process of pooling loans together is irrelevant for recording purposes. In MOM loans, MERS is listed as nominee to the lender and its successors, so MERS continues to act at the behest of whoever the owner might be, and the public records remain unchanged. Clerks and recorders assert that MERS violated state laws that require recording of all such transfers, and that failure to record resulted in a decrease in revenue for their offices. For example, the Dallas County Texas Complaint cites a Texas statute stating that [t]o release, transfer, assign, or take another action relating to an instrument that is filed, registered, or recorded in the office of the county clerk, a person must file, register, or record another instrument relating to the action in the same manner as the original instrument was required to be filed, registered, or recorded.5 Similar statutes are cited by other clerks around the nation.6 By failing to record as required by statute, the clerks argue, MERS deprived the clerks of revenue lawfully due. MERS for its part, argues that clerks are not due money for assignments that were rendered superfluous by the creation of the MERS system.7 In plain English, MERS will usually argue that the clerks do not
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Electronic copy available at: http://ssrn.com/abstract=2227789

deserve money for assignments unrecorded. As will be explained, infra, courts have not been especially receptive to clerks arguments, even in the face of statutory language which appears to mandate recording transfers of interest. Claim Two: MERS Uses Deceptive Language to Avoid Recording Clerks have also alleged that MERS uses deceptive terms in its mortgage documents for the purpose of avoiding recording requirements and fees. This point can take several different angles: in the Dallas County, Texas lawsuit, for example, the clerk argued that MERS falsely described itself as a beneficiary on deeds of trust in order to get the clerk to accept those documents for recording.8 This can result in an asserted cause of action for misrepresentation, whether fraudulent or negligent. The argument that MERS cannot be a mortgagee while simultaneously describing itself as merely a nominee has already been discussed extensively. The clerks who assert this idea largely parrot the arguments of Professor Christopher Peterson, who cites to various anti-MERS decisions holding that MERS is not a traditional mortgagee or beneficiary.9 Peterson and the clerks argue that it is improper for MERS to list itself as a mortgagee because [i]t causes county recorders that maintain grantor-grantee indexes to list MERS in the chain of title for the land and creates a false lead in the true chain of title defeating an essential purpose of recording mortgages and deeds of trust.10 In the context of foreclosure litigation, such arguments have not fared well in the majority of cases. As I have discussed elsewhere, many courts have ruled that MERS has standing to bring foreclosure actions, regardless of whether it is a true or traditional mortgagee.11 MERS can be deemed an agent, a nominee, or any number of other such statuses giving it standing to bring foreclosure. In clerks lawsuits, however, it was not so clear from the outset that this type of attack against MERS would fail. For the time being, the argument has not resonated with courts in the arena of clerks lawsuits either, as will be examined, infra. Essentially, this argument is another pathway that clerks travel upon to arrive at the same place as in their initial claim: MERS engaged in wrongful conduct resulting in economic harm to clerks. In a fraudulent or
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negligent misrepresentation through falsely stating it is the mortgagee, MERS undertakes its wrongful conduct by commission. In failure to record claims, its alleged harm is perpetrated through omission. In either case, the wrongs result in fewer recordings and less revenue generated for clerks. Claims Three, Four and Five: Unjust Enrichment, MERS is Evil, and Other Such Arguments As a corollary to the first two claims typically made by clerks in lawsuits against MERS, such lawsuits frequently contain a claim for unjust enrichment.12 These claims are natural extensions of the first two claims above. The core idea remains the same: MERS allegedly diverts money from county clerks in an improper manner by failing to record assignments. Aside from the most common claims and the unjust enrichment theory discussed above, clerks also have attacked MERS on various other grounds. One tactic, taken by the Dallas County Clerks lawsuit, is to paint a picture of MERS as a primary cause of the economic bubble and collapse.13 This line of argument asserts that, but for MERS easing of the assignment process, securitization of residential mortgages would never have reached the heights achieved during the housing bubble. Thus, such an argument essentially accuses MERS of causing the current economic crisis. Although it is beyond the scope of this Article to assess the extent of the validity of this claim, it is undisputed that MERS easing of the assignment process did facilitate the securitization of home mortgage loans. It is not clear that any clerks are attempting to fashion this argument into a legal claim for relief, but it is nonetheless noteworthy for its attempt to produce judicial skepticism towards the MERS system. Another anti-MERS argument produced in the context of these newly burgeoning clerks lawsuits is that MERS has effectively usurped the public function of clerks and has created a private recording system. Floridas Duval County Clerk propounded this argument in its lawsuit against MERS by including a novel count for a writ of quo warranto, which sought to prevent MERS from acting as a private recording system and to force MERS to record every future transfer in the public records.14 These claims were echoed by the Dallas County Clerk, who claimed that MERS
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collapsed the public recording system in the U.S.15 In some respects, it is clear that MERS does seek to replace the need to record certain transactions. Some of the more virulent MERS critics, like Peterson, have previously raised this point. However, as will be seen, infra, the assertion that MERS unlawfully creates a private system, or that MERS produces unfortunate public policy externalities rarely holds weight with courts. Instead, courts generally assume that MERS and its principals failure to record assignments does not violate a statutory duty to record. Qui Tam Actions The claims brought forth by county clerks, and the potential recoveries clerks lawsuits sought, have also led to a spate of qui tam actions. One private actor in particular, Barrett Bates, filed several lawsuits in different states, suing MERS on the basis of alleged violations of those states false claims acts.16 These false claims acts generally prohibit making false statements or recording false documents to avoid an obligation to pay money to the government.17 Here, Bates consistently claimed in many jurisdictions that MERS falsely claimed to be the mortgagee or beneficiary on deeds of trust in order to avoid having to record assignments and therefore pay document recording fees.18 In this respect, his claims were not altogether unique when compared with the claims made by clerks. What is distinct about these qui tam actions is the additional threshold requirements placed on a plaintiff in order to bring a claim. As will be discussed, infra, these additional requirements resulted in dismissal of Bates qui tam actions, although these dismissals do not necessarily mean he or other private litigants will stop filing lawsuits against MERS. The Courts' Response Overall, the revenge of the clerks has been hampered by most courts failure to allow the lawsuits to progress past MERS motions to dismiss. First, regarding the primary claim that state laws require assignments to be recorded, most courts have found that their states laws do not, in fact, require all assignments to be recorded. This spelled the death knell for lawsuits in Iowa, Texas, Florida, and Arkansas. The Court adjudicating the Plymouth County, Iowa Clerks lawsuit, for example, noted that Iowa is a lien theory state, meaning that an assignment of mortgage does not transfer
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title.19 Thus, given that Iowa law does not require assignments to be recorded, the rest of the clerks lawsuit failed.20 Other courts, such as the court ruling on the Hot Springs, Arkansas Clerks case, have found that although it may be unwise not to record, recording is simply not mandatory under certain states laws.21 One singular exception to this trend is the order denying MERS motion to dismiss in the Montgomery County, PA lawsuit, which held that the Pennsylvania statute was unambiguously clear in requiring assignments to be recorded.22 Where courts have found a duty to record, they have generally ruled that the duty does not give a cause of action to the county clerk, but rather to property owners. The Christian County, Kentucky Clerks lawsuit was felled by this reasoning. The court there held that the legislature did not intend that county clerks be benefited by the requirement to record documents affecting title. Lack of recording fees for the clerk was not the reason the legislature enacted the requirement; rather, the statute was held to be intended to benefit subsequent property owners, creditors, and homeowners.23 Therefore, the clerk could not sue on the basis of such a requirement. Next, courts have usually rejected causes of action based on the allegation that MERS is lying when it states that it is a beneficiary or a mortgagee. The dominant theory behind this failure could be based upon the existing standing jurisprudence discussing MERS various statuses in foreclosure litigation. However, what is apparently more persuasive to courts is the fact that, even if MERS did lie and falsely claim it was a mortgagee or beneficiary, clerks would still have to record those documents. The Duval County Clerks allegation of untruthful recording failed on this very point: the court held that the recording was merely a ministerial act unaffected by some general duty to ensure the veracity of the public records.24 Similarly, just as in the case of a duty to record assignments, the courts have held that even if MERS did owe a duty to record wholly truthful documents, that duty does not provide a cause of action to clerks.25 Again, no clerk has yet shown that a legislature intended clerks to be benefited by recording statutes or to gain a cause of action stemming from the publics duty not to record false documents.26
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Finally, as to the general assertions that MERS has resulted in the downfall of public recording or that MERS helped to cause the housing bubble, courts seem relatively unaffected by such inflammatory language. This is unsurprising to those who have inspected the current state of the law in MERS-related foreclosures. I have noted in previous research that courts seem inclined to discount homeowners anti-MERS arguments in the face of a borrowers default. Similarly, in the context of clerks lawsuits, courts seem apathetic towards the overall effects MERS has had on public recording in the United States. Simply put, courts have not been persuaded to rule for clerks based upon the fact that MERS may produce some negative externalities. The Duval County Clerks lawsuit seems particularly illustrative of this point: the ruling judge seemed to regard the attacks upon MERS manner of business as academic, almost gleefully noting that the countys claims were significantly drawn from Professor Petersons research and from one recently overruled anti-MERS decision.27 This is yet another arena of MERS litigation in which the most virulent MERS opponents do not seem to be persuading the majority. Rather, courts seem to view the development of MERS not as a sneaky conspiracy on behalf of the nations largest banks, but rather a new development attempting to deal with modern market realities. Qui Tam actions have met a similar fate as clerks lawsuits, but for different reasons. The Bates complaints arose from reverse false claims statutes, which entail more standing hurdles than an average clerks lawsuit. Not only do qui tam actions require the private actor bringing suit to prove their substantive allegations, but these suits also evince whistleblower threshold issues. To bring such a suit, a private actor like Bates must show that he was responsible for discovering the information leading to the claim or that he had direct and independent knowledge of the information, and that he delivered that information to the state actor prior to bringing suit. Bates has consistently failed to meet all of these prongs.28 Perhaps most notably, Bates admits that he only became aware of MERS in 2009.29 Accordingly, courts have consistently held that he was not an original source of MERS alleged
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malfeasance. Furthermore, courts have noted that Bates claims mimicat times nearly identicallyclaims or assertions put forth in public accounts of anti-MERS arguments.30 To date, Bates has failed in his qui tam quests in several states. Conclusion So of what import is this most recent spate of MERSrelated litigation, given that the vast majority of suits have been dismissed? First, although this Article has taken a relatively skeptical and pessimistic view of these antiMERS lawsuits, banks and their advocates must remain wary of these seemingly unending matters. Just as the tobacco lawsuits were initially met with skepticism and ridicule, one large win was all it took to turn regular routs into an industry-changing victory. Here, one verdict in favor of a clerk in a class-action suit could result in a ruling that MERS must go back and, for example, record innumerable assignments or pay millions of dollars in avoided recording fees. This, in turn, could result in a new appraisal of the viability of MERS manner of business. Similarly, one pro-clerk verdict could spur even more lawsuits. This is all the more reason for MERS and its bank co-defendants to treat these lawsuits as life or death situations. Even suits that survive motions to dismiss could give courage to more clerks to file additional suits. Thus, even though MERS has an impressive string of victories in these cases, each defeat, no matter how technical or procedural, has the potential to cost MERS and its member institutions ever more in legal costs and scrutiny. Another observation based upon these recent clerk lawsuits is the unfortunate tendency of state actors to take underwhelming, tardy, or self-serving action when faced with questionable lender conduct. In the context of the robo-signing scandal, legislators and state attorney generals only began investigating faulty lender practices once the popular press had exposed such conduct years after the first robo-signing deposition had become public record. Then, when lenders were forced to pay for their mistakes, some state legislatures diverted funds to plug budgetary holes rather than to assist homeowners. Likewise, when confronted with news of questionable attorney conduct, the government sponsored entities continued to refer cases to firms under investigation for misconduct.
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The analogy to clerks lawsuits is clear: MERS began operating and recording mortgages and deeds of trust around the country long before the housing bubble began to grow. For years and years, MERS increased the percentage of loans for which it appeared as mortgagee on the public records. Yet, prior to popular press accounts and academic discussions of MERS, not a single county clerk around the country found it necessary to investigate what this new amorphous company represented. Only when a potential for recovering vast sums of money became evident did clerks begin to become so concerned with the integrity of the public records. If MERS represents the evil clerks lawsuits often assert that it does, then those very same clerks bear an obligation to explain to the public why they did not care to investigate MERS five or ten years ago. Given clerks utter failure to account for their lack of initiative during the rise of MERS and that they only have fought MERS now that money is potentially recoverable, clerks claims of being concerned with the protection of the public ring incredibly hollow. Next, amid this discussion of clerks challenges to MERS, one can consider the implications for MERS in the future separate and distinct from such clerks lawsuits. As this Article has noted, MERS has been a lightning rod for litigation and criticism since the housing crisis began. Even now, MERS faces unfavorable decisions from time to time in the foreclosure context.31 Just as anti-MERS rhetoric grew after the collapse of the housing market and the increase in numbers of foreclosures and spurred these clerks suits, these suits may yet inspire another wave of litigation involving MERS. What form this wave may take, whether in qui tam fashion or otherwise, remains to be seen. Yet what has remained constant since the collapse of the bubble is MERS involvement in a significant amount of litigation and controversy. As seen by the emergence of these clerks lawsuits, this trend is unlikely to cease in the future. Finally, any discussion of clerks MERS lawsuits would be lacking without mentioning one of the great ironies of the mere existence of such suits. Clerks are suing MERS for its failure to record assignments and its failure to utilize public recorders. Yet, county clerks and recorders own ineptness is, in large part, the very
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reason for MERS existence. Bankers created MERS out of a need to avoid the costly, inefficient, and often error-prone manual recording services given by clerks. Now, clerks essentially are suing banks for the audacity of desiring to avoid such a drag on the market. If clerks had modernized and provided the speed and quality of service needed by the private marketplace, then the private sector would have had no cause to create MERS in the first place. Furthermore, one can reasonably take either side of arguments regarding the legal propriety of MERS failure to record every assignment when a transfer in the beneficial ownership of loans takes place. Likewise, one can make persuasive arguments and counterarguments regarding the effects MERS has had on transparency of public records. What is essentially undisputed, however, is that MERS failure to record assignments resulted in less work for clerks. Clerks are therefore essentially asking to recoup money for services not performed. After considering their lack of action during the ascendancy of MERS, their showing initiative only once money appeared to be recoverable, and their attempt to recoup money for services not rendered, clerks assertions of righteous fury on behalf of an unwitting public, therefore, are simply not very convincing. One quixotic counterargument to this authors assertion of irony and insincerity noted above was evoked in the Dallas County, Texas Clerks lawsuit. The complaint referenced a clerks letter to Iowa Attorney General Tom Miller, which rejected MERS claims of saving work for clerks by eliminating recording large numbers of assignments.32 The quoted clerk exclaims, This is help we did not ask for, nor was it help that we needed. But in the very same protest, the clerk admits that 57% of clerks do not have e-recording accessible to the public.33 Clerks may not have asked for MERS help in reducing the number of recorded assignments, but they certainly spurred it by their failure to modernize to meet the needs of the modern marketplace. In a circular piece of logic, the Duval County Clerk claims that it was MERS very failure to pay such recording fees which resulted in the lack of modernization.34 This claim is to a certain degree absurd. It appears from the history of MERS that the converse is true: despite lenders paying fees for interim assignments for years, clerks
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still did not produce a majority of jurisdictions that could e-record cheaply and efficiently. This apparently spurred the need to circumvent the system. In other words, failures of the system produced MERS; MERS did not create the failures of the system. While one can certainly argue, as I and others have, that MERS does obscure the information-bearing capacity of the public records, the fact that lenders thought such a creation was so advisable is a reflection on the antiquated procedures of clerks, not on banks sinister intent to destroy the public records of the country. As the law stands now, therefore, even MERS detractors have to recognize the impressive ascendancy and resiliency of the MERS registry. Despite arousing popular controversy and countless lawsuits, MERS has by and large weathered most of the storm surrounding its manner of business. As this Article has examined, clerks lawsuits and qui tam actions appear to be an expensive nuisance to MERS and to its member institutions. Such lawsuits do not, however, appear to be a final dagger for those who wish to see MERS destroyed. On the other hand, just as anti-MERS decisions in foreclosure can have nationwide repercussions, one victory for a clerk or a qui tam litigant could generate significant losses for MERS and its members. As with all MERS-related litigation, the settled legal result has yet to be realized.

7. Order, District of Columbia ex. rel. Barrett Bates, 2010 CA 002993 B (Super. Ct. D.C. May 7, 2012), at 18-20 (noting the many instances in which MERS has touted its cost savings to lenders by eliminating the need to record assignments). 8. Compl. 105-6, in Dallas County, TX v. MERSCorp, Inc., Case No. 3:11-cv-02733-O (N.D. Tex. Oct. 31, 2011). 9. Christopher Peterson, Two Faces: Demystifying the Mortgage Electronic Registration Systems Land Title Theory, 53 William & Mary L. Rev. 111 (2011). 10. Christopher Peterson, Two Faces: Demystifying the Mortgage Electronic Registration Systems Land Title Theory, 53 William & Mary L. Rev. 111, 143-44 (2011). 11. Dustin A. Zacks, Standing in Our Own Sunshine: Reconsidering Transparency, Accuracy, and Accuracy in Foreclosures, 29 Quinnipiac L. Rev. 551 (2011). 12. See e.g. Compl. 60-66, Fuller v. Mortgage Electronic Registration Systems, Inc., 16-2011-CA-008974 (Fla. 4th Cir. Oct. 31, 2011). 13. Compl. 25, Dallas County, TX v. MERSCorp, Inc., Case No. 3:11-cv-02733-O (N.D. Tex. Oct. 31, 2011). 14. Compl. 22-23, Fuller v. Mortgage Electronic Registration Systems, Inc., 16-2011-CA-008974 (Fla. 4th Cir. Oct. 31, 2011). 15. Compl. 26, Dallas County, TX v. MERSCorp, Inc., Case No. 3:11-cv-02733-O (N.D. Tex. Oct. 31, 2011). 16. See e.g. District of Columbia ex. rel. Barrett Bates, 2010 CA 002993 B (Super. Ct. D.C.). 17. Order, District of Columbia ex. rel. Barrett Bates, 2010 CA 002993 B at 8 (Super. Ct. D.C. May 7, 2012). 18. Order, District of Columbia ex. rel. Barrett Bates, 2010 CA 002993 B at 3 (Super. Ct. D.C. May 7, 2012)(Mr. Bates states that he realized that the naming of MERS as mortgagee of record or beneficiary as nominee for the lender allegedly constituted a false statement, and that the recordation of such a document constituted fraud.). 19. Memorandum Opinion and Order, Plymouth County, Iowa v. MERSCORP , Inc., Case No. C 12-4022-MWB at 15-16 (N.D. Iowa Aug. 21, 2012). 20. Memorandum Opinion and Order, Plymouth County, Iowa v. MERSCORP , Inc., Case No. C 12-4022-MWB at 14-15 (N.D. Iowa Aug. 21, 2012). 21. Order, Mayme Brown v. Mortgage Electronic Registration System, Inc., Case No. 6:11-cv-06070-SOH at 5-6 (W.D. Ark. Sep. 17, 2012). 22. Memorandum and Order, Montgomery County, PA Recorder of Deeds v. MERSCORP , Inc., No. 11-cv-6968 (E.D. Pa. Oct. 19, 2012) at 12-15. 23. Memorandum Opinion and Order, Christian County Clerk v. Mortgage Electronic Registration Systems, Inc., Case No. 5:11CV-00072-M at 8 (W.D. Ky. Feb. 21, 2012). 24. Order, Fuller v. Mortgage Electronic Registration Systems, Inc., 3:11-cv-1153-J-20MCR at 30 (M.D. Fla. June 27, 2012). 25. Order, Mayme Brown v. Mortgage Electronic Registration System, Inc., Case No. 6:11-cv-06070-SOH at 7 (W.D. Ark. Sep. 17, 2012). Banking & Financial Services Policy Report 23

Notes
1. For a more detailed explanation of the development of MERS discussed in the introduction, see Dustin A. Zacks, Standing in Our Own Sunshine:Reconsidering Transparency, Accuracy, and Accuracy in Foreclosures, 29 Quinnipiac L. Rev. 551 (2011). 2. A more elaborate examination of foreclosure-related MERS litigation can be found in Zacks, supra note 1, at 566-584. 3. Dustin A. Zacks, MERS is Dead: Long Live MERS, 44 Conn. L. Rev. CONNtemplations 62 (2012). 4. See e.g. Compl. 134, Dallas County,TX v. MERSCorp, Inc., Case No. 3:11-cv-02733-O (N.D. Tex. Oct. 31, 2011)(Defendants violated section 192.007 of Texas Local Government Code by failing to record all releases, transfers, assignments, and other actions relating to the deeds of trust in which they, separately or jointly, identified MERS as the beneficiary,). 5. Compl. 133, Dallas County, TX v. MERSCorp, Inc., Case No. 3:11-cv-02733-O (N.D. Tex Oct. 31, 2011). 6. Order, Mayme Brown v. Mortgage Electronic Registration System, Inc., Case No. 6:11-cv-06070-SOH (W.D. Ark. Sep. 17, 2012), at 3 (noting that the clerk alleged a duty to record every mortgage transfer.). Volume 32 Number 1 January 2013

26. Again, the one exception to this is the Montgomery County suit, where the court noted that MERS could not cite to any rule limiting clerks right to recover fees. Memorandum and Order, Montgomery County, PA Recorder of Deeds v. MERSCORP, Inc., No. 11-cv-6968 at 30 (E.D. Pa. Oct. 19, 2012). 27. Order, Fuller v. Mortgage Electronic Registration Systems, Inc., 3:11-cv-1153-J-20MCR at 3, 31 (U.S. M.D. Fla. June 27, 2012). 28. See e.g. Order Granting Each Def.s Dismissal Mot. for Lack of Subject Matter Jurisdiction, State of California ex rel Barrett R. Bates v. Mortgage Electronic Registration System, Inc., Case No. 2:10-cv-01429-GDB-CMK at 8 (U.S. E.D. Cal. Mar. 11, 2011) (Plaintiff s allegation in his First Amended Complaint are substantially similar to information already in the public domain. (internal cite omitted)).

29. Order Granting The Defs. Mot. To Dismiss, State of Indiana ex rel Mortgage Electronic Registration System, Inc., Case No. 49D120911-CT-051734 at 30 (Marion Sup. Ct. June 22, 2012). 30. Order Granting Each Def.s Dismissal Mot. for Lack of Subject Matter Jurisdiction, State of California ex rel Barrett R. Bates v. Mortgage Electronic Registration System, Inc., Case No. 2:10-cv01429-GDB-CMK at 8 (E.D. Cal. Mar. 11, 2011). 31. See e.g. Bain v. Metropolitan Mortgage Group, Inc., Case No. 86206 (Wash. Aug. 16, 2012). 32. Compl. 95, Dallas County, TX v. MERSCorp, Inc., Case No. 3:11-cv-02733-O (N.D. Tex. Oct. 31, 2011). 33. Compl. 95, Dallas County, TX v. MERSCorp, Inc., Case No. 3:11-cv-02733-O (N.D. Tex. Oct. 31, 2011). 34. Compl. 24, Fuller v. Mortgage Electronic Registration Systems, Inc., 16-2011-CA-008974 (Fla. 4th Cir. Oct. 31, 2011).

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