Robinson v. American Home Mortgage Servicing, Inc.

Mortgage Electronic Registration Systems, Inc. (“MERS”), a subsidiary of MERSCORP, Inc., operates an electronic mortgage registration system (“the MERS System”). MERS is distinct from the MERS System. The MERS System is a private electronic database that records the ownership of and servicing rights in home loans. Various financial institutions are members of the MERS System. We described the operation of the System in our recent decision in Cervantes v. Countrywide Home Loans, Inc., 656 F.3d 1034, 1039 (9th Cir.2011). We have before us an appeal from an order of the district court dismissing plaintiffs’ claims related to the formation and operation of the MERS System. We dismiss in part, affirm in part, and reverse in part.

I. Background

Under the MERS System, the lender owns the home loan borrower’s (or mortgagor’s) promissory note. MERS, as the “nominee” of the lender and of any assign-ee of the lender, is designated in the deed of trust (or mortgage) as the “beneficiary” (or mortgagee) under the deed of trust. (For convenience, we will use the terms “borrower,” “deed of trust,” and “beneficiary,” rather than “mortgagor,” “mortgage,” and “mortgagee.”) MERS rather…