Federal Court Dismisses Lawsuit Challenging MERS System and Seeking to Enjoin Foreclosures
A federal district court in Arizona recently dismissed a putative class action seeking to enjoin non-judicial foreclosures in 29jurisdictions. The lawsuit was one of seven related actions that challenge the viability of the MERS system for tracking ownership and servicing rights in mortgage loans, claiming that several large lenders established MERS solely to make “predatory” loans to borrowers and to hide their interests in the loans. The decision in
Cervantes rejected a number of loan origination-related claims, as well as various conspiracy claims relating to MERS. The court dismissed the lawsuit with prejudice, and denied plaintiffs’ request to amend their complaint on the ground that doing so would be futile. Goodwin Procter partners Tom Hefferon, Gwyn Williams, and Joe Yenouskas represented Bank of America, Countrywide Home Loans, and Wells Fargo.
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Cervantes v. Countrywide Home Loans, Inc., No. CV 09-517-PHX-JAT (D. Ariz. Sep. 24, 2009).