“But he said “MERS did not have authority, as ‘nominee’ or agent, to assign the mortgage absent a showing that it was given specific written directions by its principal. This court finds that MERS’s theory that it can act as a ‘common agent’ for undisclosed principals is not support(ed) by the law.”
“He said that in future cases involving MERS, parties seeking in bankruptcy proceedings to avoid the ban on legal claims must show they own both the note and the mortgage.”
Whether or not one party can act as agent for another party, and to what extent that party can act is spelled out in the contracts between the parties and is usually found binding UNLESS THE LAW SAYS IN SOME SPECIFIC CIRCUMSTANCE IT IS NOT and is usually NOT prohibited just because one party gives another party wide latitude to act as their agent without incident by incident instructions.
I think the judge might be acting, wrongly, on how poorly MERS has done things, as opposed to the true legality of whether or not it had authority for its actions according to its contracts with banks and mortgage lenders.
Karl Denninger explains it much better than I can:
In many states, there is NO position of “nominee” for real estate titles.
Let me explain a minute where the term “nominee” comes from. It does NOT come from the world of real estate.
When you hold stock in an account at your broker, your stock is held “in street name” with your broker as the “nominee” for you, and your broker has an internal record of how many shares of X (US Steel as an example) you own, Mr. Smith owns, etc. They’re all held “in street name” by your broker as nominee for you.
MERS tried to apply the same kind of idea that made selling stocks and bonds easy-peasy-lemon-squeezy on the street. Well, trouble is, there is no such thing as “nominee” in many states’ real estate title law. There is no such noun, no such position, no such thing.
So MERS calling themselves nominee on a mortgage or note is like calling themselves “Martian with a pink tutu.” It is an amusing non-sequitur in the real estate transfer.
Now, calling themselves an “agent” might work in some states. Calling themselves an “attorney in fact” might work in others. But in this state (eg, Wyoming), where is no such thing as “nominee” in real estate law. Go ahead, read the statutes and case law. No such term exists.