A homeowner acquired a loan, signing and delivering a note and trust deed to the originating lender identifying the Mortgage Electronic Registry Systems, Inc. (MERS), an electronic registry which manages off-record assignments of trust deeds in the secondary mortgage market, as the beneficiary under the trust deed. The trust deed gave the beneficiary the right to conduct a non-judicial foreclosure and sell the home if the homeowner defaulted on the note and trust deed. The homeowner defaulted on the note and trust deed. MERS, as the beneficiary named in the trust deed, recorded a notice of default (NOD) commencing a non-judicial foreclosure. A declaration from the servicer of the trust deed loan was the only authority used by MERS to foreclose. The homeowner claimed the NOD recorded by MERS was unenforceable since the note and trust deed had been sold and assigned in the secondary mortgage market, and the current holder of the note did not authorize the beneficiary to foreclose. MERS claimed the NOD they recorded was enforceable since the trust deed signed by the homeowner gave MERS the right to foreclose and sell the home, requiring no other authority to foreclose. A California court of appeals held the NOD recorded by MERS, as the beneficiary of record under the homeowner’s mortgage, was enforceable solely by the beneficiary since the trust deed specifically gave the named beneficiary the unconditional right to foreclose and sell the home. [Gomes v. Countrywide Home Loans, Inc. (2011) 192 CA4th 1149]
