In the above ruling the Idaho Supreme Court affirmed the trial court ruling dismissing a foreclosure victim's complaint alleging MERS had no right to foreclose because of no beneficial interest in the note.
The court said non-judicial foreclosures don't require standing, citing Trotter v. Bank of New York Mellon, 152 Idaho 842, 846, 275 P.3d 857, 861 (2012).
The court memorialized its position on MERS with this discussion and holding:
Thus, MERS, as the holder's nominee, may foreclose a defaulted mortgage in Idaho.
"The definitions section of the deed of trust stated: "MERS is a separate corporation that is acting solely as a nominee for Lender and Lender's successors and assigns.MERS is the beneficiary under this Security Instrument." Thus, MERS, as beneficiary, was acting solely as the nominee of the lender and its successors and assigns. A nominee is "[a] person designated to act in place of another, usu. in a very limited way." Black's Law Dictionary 1072 (7th ed. 1999). "[A]n agent is a person authorized to act for or in the place of the principal." Knutsen v. Cloud, 142 Idaho 148, 151, 124 P.3d 1024, 1027 (2005). As the definitions indicate, a nominee is merely a form of agent.
""Any person who is sui juris and has capacity to affect his or her legal relationships by giving consent to a delegable act or transaction may authorize an agent to act for him or her with the same effect as if such person were to act in person." 3 Am. Jur. 2d Agency § 9 (2002). The lender, Lehman Brothers, had the authority to designate an agent to act in its behalf, and the actions of its agent, MERS, were the actions of Lehman Brothers. "An agent can bind his principal by acts within the scope of his apparent authority." Clements v. Jungert, 90 Idaho 143, 151, 408 P.2d 810, 814 (1965). Designating MERS as the beneficiary in its representative capacity as nominee of Lehman Brothers and its successors and assigns was legally no different from designating Lehman Brothers and its successors and assigns as the beneficiary. "Pursuant to the grant of authority by the principal, the agent is the representative of the principal and acts for, in the place of, and instead of, the principal." 3 Am. Jur. 2d Agency § 1 (2002). Therefore, having MERS the named beneficiary as nominee for the lender conforms to the requirements of a deed of trust under Idaho law."
As far as I know, Edwards, the mortgagor in this case, did not hire a professional mortgage examiner to conduct a comprehensive examination of the mortgage in order to unearth causes of action like tortious conduct, contract breaches, or legal errors by the lender or lender's agents.
Assuming that as true, stop and consider how much sense it made to pursue the MERS argument all the way to the Supreme Court of Idaho. The mortgagor could not make house payments or stopped paying because of owing more on the mortgage than the value of the property. The mortgagor pursued the matter to the trial court, the appeals court, and finally the Idaho Supreme Court, at great expense I imagine. And the mortgagor still lost the house to foreclosure. I estimate the cost of that adventure at $30,000 to $40,000, the price of a small house.
Imagine what might have happened if the mortgagor had paid $2500 for a comprehensive mortgage examination and discovered that the mortgage broker had lied on the loan application to make the borrower seem financially better off than actually, and the appraiser had lied in the appraisal, overvaluing the property by 30%. The mortgagor might have sued the lender for these outrages and won the house free and clear.
Can you see the difference in strategy? Which of these would you prefer for yourself? Which would you recommend to Edwards?
- Strategy 1 - fight the foreclosure and lose the house anyway, or
- Strategy 2 - fight the mortgage and get the house free and clear or get money damages
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P.S. Yes you may distribute this message far and wide. B.H.