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Quiet Title

Mark Cappel
UpdatedApr 19, 2024
Key Takeaways:
  • A quiet title action decides who owns the title to real property.
  • MERS is a mortgage database that made moving mortgage servicing cheaper.
  • MERS is at the center of many quiet title lawsuits.

What is a quiet title action and can it prevent a foreclosure?

Some judges are beginning to accept homeowner challenges to the banks standing to foreclose by using quiet title actions. As a result of MERS, banks have failed to physically record any assignments of the deeds of trusts or mortgages and the banks have not transferred the wet ink notes with those assignments. Banks have been caught robo-signing affidavits of lost documents and manufacturing documents to serve their legal needs. Is a quiet title affirmative defense viable to halt foreclosure?

Before I tackle your question, allow me to define several terms in your question.

Quiet Title

Put simply, a quiet title action is a lawsuit where someone asks a court to decide who owns a piece of real estate. A document produced by the Philadelphia court (PDF) offers the clearest legal explanation I found:

An action to quiet title is a lawsuit brought in a court having jurisdiction over land disputes, in order to establish a party’s title to real property against anyone and everyone, and thus "quiet" any challenges or claims to the title. It comprises a complaint that the ownership (title) of a parcel of land or other real property is defective in some fashion, typically where title to the property is ambiguous. A typical ground for complaint includes the fraudulent conveyance of a property, perhaps by a forged deed or under coercion.

Unlike acquisition through a deed of sale, a quiet title action will give the party seeking such relief no cause of action against previous owners of the property.

In ancient times, (before 1995 or thereabouts) judges would read paper titles and deeds, weigh the arguments of both sides, and decide who gets the land. Decisions where based on paper evidence, technical points in state law, and a judge's understanding of property law that changed little since medieval times. Unfortunately, this is where simplicity and clarity end, because now we must turn to a discussion of MERS.

Mortgage Electronic Registration Systems (MERS)

Mortgage Electronic Registration Systems (MERS) is a private company created by the mortgage divisions of banks to function as an electronic database consisting of key terms of all US mortgage loans. As the MERS Web site puts it, "MERS was created by the mortgage banking industry to streamline the mortgage process by using electronic commerce to eliminate paper." There is much more to MERS than being an electronic registry, but first a discussion of why bankers wanted to create an electronic database when the old paper-based system had worked for 500 years.

Back when Jimmy Stewart starred in the 1946 movie, "It’s a Wonderful Life," banks made mortgage loans to local applicants and serviced the loans for the full 30-year term. My favorite part in the movie is Stewart’s famous speech that quells rioting townsfolk who are making a run on the Bailey Building & Loan. Stewart’s character explains the economics of mortgages and savings accounts using simple, concrete terms and examples. Local savings deposits underwrite local mortgage loans. This satisfies the rioters, which allows the Bailey Building & Loan to carry on. The mortgage world has changed since 1946, and if Hollywood were to remake "It’s a Wonderful Life" today that speech would be longer, confusing, and not satisfying emotionally.

Nevertheless, here is my attempt to update Stewart’s speech: In addition to banks originating mortgages, some companies do nothing but originate mortgages and then sell them to investors, such as retirement funds, Fannie Mae and Freddie Mac, foreign governments, and mutual funds. These investors determine the risk they are willing to take when funding a mortgage. Some tolerate more risk than others in exchange for a higher interest rate. Mortgage servicers collect the mortgage payments each month on behalf of the investors in exchange for a small fee. Mortgage servicers are typically national banks.

MERS allows the responsibility of servicing mortgages to shuffle around from bank to bank without shipping paper or manual processing. It also allows mortgages to be bundled and sold as investments — in other words, mortgage-backed securities. Today, 16 years after its creation, MERS keeps electronic records on 67 million mortgages, which is approximately 60 percent of all residential mortgages. MERS takes credit for saving banks millions in mortgage processing costs, expanding the mortgage business, and making loans available to more people.

Why this history lesson and digression into MERS regarding a question about quiet title actions? Countless lawsuits across the US have questioned whether an electronic registry satisfies state land recording laws. MERS argues it does. However, MERS does not keep the original mortgage or deed of trust (which establishes the right of the lender to foreclose) and the note (the personal promise the borrower makes to repay the loan) and instead leaves these in the hands of the mortgage originator or investor.

MERS is listed as the mortgage holder in local land records. When a homeowner defaults, in almost all states the mortgagee of record is the only party that can foreclose. However, MERS is just an electronic record keeper, and does not possess the original mortgage or notes. In some cases, MERS has told local employees at mortgage servicers to identify themselves as MERS officers when filing court documents. According to the MERS Web site, "If MERS commences a foreclosure action authorized upon instructions from the note-owner, the note will be endorsed in blank and will be in the possession of the MERS officer so that MERS is the holder of the note with the rights of enforcement."

For various reasons, including not recording its mortgage interest, or producing the original mortgage and note, the legal fundamentals underpinning MERS’s business model are under attack by homeowners alleging that MERS is not the mortgagee of record, and by state and county officials who bristle at the loss of record keeping control and fees lost to MERS.


As this was written in early 2011, quiet title actions (among other causes of action) have been filed across the US that involve MERS. How these will be decided will take months or years, and may be decided by the US Supreme Court.

Whether a quiet title action can halt or delay a foreclosure will depend on the circumstances in each case. Consult with an attorney in your state who has experience in real property law if you believe you have a cause of action regarding a quiet title.

I hope that the information I have provided helps you Find. Learn. Save.



Mortgage market: a pulse check

It is expected that mortgage rates are subject to change. Homebuyers and those refinancing their mortgages should pay close attention to the latest mortgage rate

Mortgage rates April 10, 2024
According to Freddie Mac, the 30-year mortgage rate for the week of April 10, 2024 is 6.88%. This represents a 6 basis points increase from the previous week's rate.
Note: A basis point is equal to one-hundredth of one percent (0.01%). In numerical terms, if the mortgage rate changes by 20 basis points, it means the rate has changed by 0.20%.
According to Freddie Mac, the 15-year mortgage rate for April 10, 2024 is 6.16%. This is a 10 basis points increase from last week’s rates.

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  • 30-year conventional loan is 7.09%
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    Using the rates mentioned above, the monthly payment for a $279,082 30-year-year mortgage would be $1,874. A 15-year mortgage would require a monthly payment of around $2,399.

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EErnest, Apr, 2012
First of all before all of you go out hiring lawyers and spend unnecessarily, please educate yourselves about your own case. The Real Estate Settlement and Procedures Act (RESPA) guarantees your right of disclosure, meaning that one has the right to know everything that has gone on with your mortgage from the beginning. If the borrower believes there is an error in the mortgage account, he or she can make a "qualified written request" to the loan servicer. The request must be in writing, identify the borrower by name and account, and include a statement of reasons why the borrower believes the account is in error. The request should include the words "qualified written request". It cannot be written on the payment coupon, but must be on a separate piece of paper. The Department of Housing and Urban Development provides a sample letter.[1]The servicer must acknowledge receipt of the request within five business days. The servicer then has 30 business days (from the request) to take action on the request. The servicer has to either provide a written notification that the error has been corrected, or provide a written explanation as to why the servicer believes the account is correct. Either way, the servicer has to provide the name and telephone number of a person with whom the borrower can discuss the matter. The servicer cannot provide information to any credit agency regarding any overdue payment during the 60 day period.If the servicer fails to comply with the "qualified written request", the borrower is entitled to actual damages, up to $2,000 of additional damages if there is a pattern of noncompliance, costs and attorneys fees.
SSusan Carter, Dec, 2013
Really, who enforces all these fine rules?
BBill, Dec, 2013
Each state enforces the rules. More specifically, when it comes to the actions of state bank, the state banking authority will enforce its banking regulations. You can also seek relief from your state courts to enforce the state statutes and case law.
mmary, Jan, 2012
Currently have Mortgage. In 2007 had financial problems got behind. Had agreement to make up payments. Bank went ahead and did a Foreclosure. They came back and did a void foreclosure stating they did not have authority to conduct the foreclosure. We were given a loan modification at a high interest rate we still have. After the void foreclosure they increased the loan amount and continued to charge high fees while making threats to foreclose. My question is, if they did NOT have the authority to conduct foreclosure how can they insist on our paying these fees. What can we do legally.
BBill, Jan, 2012
The best person to answer your question without guessing is a lawyer who has experience in real property law, has gone toe-to-toe with mortgage servicers, and can read your loan documents. Your observation is completely on point: How can a mortgage servicer claim it can foreclose when it admitted it cannot?

You are doing what is right, moral, and just by negotiating with the mortgage servicer in good faith. However, it appears the servicer is not giving you the same courtesy. As I mentioned, consult with a lawyer who may need to file a quite title action to learn the true legal rights of the mortgage servicer.
BBubba, Mar, 2011
I'm on top of my mortgage paperwork, and know my mortgage originator sold the servicing to GMAC. How do I know if MERS has my mortgage?
BBill, Mar, 2011
Go to the MERS Servicer Identification System Web page to learn if your mortgage is in MERS.