A federal judgment against MERSCORP Inc. in favor of a Pennsylvania county has been overturned by a appellate court.
Last year, a federal judge in a 2011 lawsuit against MERS filed by Montgomery County, Pennsylvania, ruled in favor of the county.
The county recorder claimed that MERS members failed to record the transfer of promissory notes as mortgage assignments, violating Pennsylvania law.
The county sought to recover millions of dollars in unpaid recording fees.
The decision by U.S. District Judge J. Curtis Joyner in Philadelphia could have cost MERS as much as $16 million.
MERS filed an appeal in the U.S. Court of Appeals for the Third Circuit.
On Monday, the judgment was overturned by the Third Circuit, which noted that
Pennsylvania’s law imposes no duty to record all land conveyances.
“This is a significant ruling for the mortgage finance industry in the Commonwealth of Pennsylvania,” MERSCORP Holdings Vice President for Corporate Communications Janis Smith said in a written statement. “MERS has always maintained that no Pennsylvania law, including the recording statute, imposes a duty to record the transfer of a promissory note.”
The Pennsylvania decision follows a similar outcome
in Kentucky, where the U.S. Court of Appeals for the Sixth Circuit in Christian County. Clerk ex rel Kem v. Mortgage Electronic Registration Systems, Inc., upheld in June a judgment in favor of MERS.
