Bay State Bankruptcy Court: State Law Allows Mortgage Holder To Foreclose Despite Lack Of Ownership Interest In Underlying Note

Housing Wire reports:

• Mortgage Electronic Registration Systems, the real estate registry at the center of foreclosure litigation, says a U.S. Bankruptcy Court in Massachusetts validated a MERS title assignment this week despite the promissory note moving through a succession of owners.



• The case was decided by Bankruptcy Judge Melvin Hoffman who said "Massachusetts law allows a mortgagee with no interest in the underlying obligation to foreclose, the trustee's argument that MERS did not have a sufficient interest in the debtor's property to foreclose the mortgage fails."



• The judge added, "the fact the debtors' promissory note passed like a hot potato down a line of owners, including some in bankruptcy and liquidation, with no accompanying assignment of the note holders beneficial interest in the mortgage, changes nothing."

For more, see Massachusetts bankruptcy judge, other courts validate MERS assignments.

For the court ruling, see In re Marron, Case No. 10-45395-MSH (Bankr. D. Mass. Central Div. June 29, 2011).