MERS Prevails in Cases Brought by Four Pennsylvania Counties

June 6, 2017

In May, the Commonwealth Court of Pennsylvania reversed a lower court’s ruling and ruled by a majority opinion in favor of MERSCORP Holdings Inc. in four lawsuits filed by the recorders of four Pennsylvania counties (Delaware, Berks, Bucks and Chester).

In each of the four cases, the respective county recorder claimed that Mortgage Electronic Registration Systems, Inc. (MERS) and MERS  System Members failed to record mortgage assignments upon the transfer of promissory notes in violation of Pennsylvania recording laws.

The trial court denied MERS and the MERS System Members joint preliminary objections and the

Appellate Court granted their petition for review and reversed the trial court finding that Pennsylvania law does not mandate the recording of every mortgage and mortgage assignment.

Judge Wojcik, writing for the majority, further stated, “Our conclusion is grounded in the clear language of the statute, and it also is supported by a body of case law interpreting Pennsylvania recording laws that specifically addresses the purpose of those statutes and the effect of a failure to record an interest in the land.”

In its opinion, the Court agrees with the 3rd Circuit Court of Appeals opinion in Montgomery County, Pennsylvania, Recorder of Deeds v. MERSCORP, Inc., 795 F.3d 372 (3rd Cir. 2015), which reversed the district court’s holding and held that the applicable recording statute does not create a duty to record all land conveyances.

“We are pleased that the State Appellate Court and the Federal Court of Appeals both have issued rulings in our favor in a total of five cases now,” said MERSCORP Holdings Vice President for Corporate Communications, Janis Smith. “The Pennsylvania law, including the recording statue, does not impose a duty to record the transfer of a promissory note and case law on this issue is clear.”

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