This is an Important Ruling, Pay Attention. Oregon Foreclosure Court Decision.

"A federal judge has yet again issued a ruling that effectively questions the validity of scores of foreclosures in Oregon, a crisis the Legislature could resolve in the mortgage industry's favor this week if bank lobbyists and House Republican leaders have their way.

In an opinion issued Wednesday, U.S. District Court Judge Michael Simon rejected a magistrate judge's finding and rulings by two of his colleagues that big banks could avoid recording notices in local land records each time a loan is sold to other lenders or investors.

Simon sided with two other federal judges in Oregon in ruling that lenders have violated state recording law. They've done this, they say, by logging sales within its nationwide Mortgage Electronic Registration Systems Inc. and declaring MERS a “beneficiary” of the loan.

The mortgage industry created MERS to reduce the need for recording loan sales, or assignments. That enabled mortgages to be quickly bundled and sold to investors. MERS does not loan money, collect loan payments or invest in mortgages. It is, however, named in certain loan documents as the mortgagee or beneficiary of record.

Simon ruled that under state law, lenders must file a notice in county records each time they sell or transfer a note, or a promise from a borrower to pay.

MERS, he ruled, can file those notices on the lenders' behalf, if a lender has authorized it to do so. MERS cannot, however, simply log those notices within its own database without also recording it publicly, he found. In millions of loans nationwide, it has.

In acting as he did, Simon overruled lower Magistrate Janice Stewart's previous findings and recommendations in the case. His ruling also conflicts with opinions in other cases issued by his equals in Oregon -- Judge Michael Mosman and Judge Marco A. Hernandez.

But it aligns with rulings in other cases by Judge Owen Panner and U.S. Bankruptcy Judge Frank Alley. Panner's ruling, which also came last year as lawmakers debated the MERS issue, is on appeal to the U.S. Ninth District Court of Appeals."

Source and Full Article
http://www.oregonlive.com/finance/index.ssf/2012/03/another_federal_ruling_against.html