Last Friday, the Eighth Circuit affirmed the dismissals of claims filed by county recorders in Iowa and Minnesota who claimed that the use of the Mortgage Electronic Registration System (MERS) unjustly deprived the counties of recording fees. In Plymouth County v. Merscorp, Inc., Plymouth County, on its own behalf and on behalf of all similarly situated counties in Iowa, brought suit in state court alleging that various loan originators and servicers deprived Plymouth County of revenue by using MERS to avoid paying recording fees on mortgage assignments. After the lenders removed the action to federal court and filed a motion to dismiss, the district court granted the motion to dismiss. In Plymouth County, the Eighth Circuit noted:
A mortgagee's decision to record a mortgage assignment with MERS and pay it the corresponding fee does not result in MERS obtaining payment of money which belongs to Plymouth County. Because Iowa law does not impose a duty on assignees to record assignments of real estate mortgages, Plymouth County's unjust enrichment claim fails to state a claim upon which relief may be granted.
In County of Ramsey v. MERSCORP Holdings, Inc., eighty-seven Minnesota counties filed a class-action suit against various loan originators and servicers, asking the Eighth Circuit to find that the district court erred in determining that Minnesota's Recording Act was not mandatory and that the counties' unjust enrichment and public nuisance claims failed in the absence of a recording requirement. The Eighth Circuit affirmed the dismissal of the Minnesota county recorders' claims as well.
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