Third Circuit supports MERS, holds that Pa. law does not require mortgage transfers to be recorded to be valid

Pennsylvania statutes have language that might have been interpreted to require transfers of interests in land (through deeds or mortgages) to be recorded to be valid. If true, that would have undermined the MERS system of mortgage registration. But the Third Circuit gave MERS a win and interpreted Pennsylvania law to recognize mortgage transfers at the moment they are signed; recording is not required for the transfer of the property interest to be valid but is simply for the convenience of the parties and subsequent conveyees. The case, Montgomery Cty. v. MERSCORP, Inc, 2015 U.S. App. LEXIS 13482 (3d Cir. 2015), is another win for MERS among the federal Circuit Courts in a series of cases that challenged its business model.

The result of the case, as with other MERS-registered mortgages, is that there is no longer a public record of mortgage transfers since those records appear, if at all, on the computers at MERS and that information is not available to the public. Even if it were, it would be unrevealing because the banks adopted a policy of not recording mortgage transfers in any event.