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MERSCORP Dismissed in Conspiracy and Fraud Suits

NationalMortgageProfessional.com
May 31, 2013

MERSCORP Holdings Inc. announced that Judge William F. Kuntz, II, of the U.S. District Court for the Eastern District of New York ruled in favor of MERSCORP Holdings, Inc. and dozens of MERS member institutions in a suit asserting a litany of allegations surrounding conspiracy and fraud. In Abraham v. American Home Mortgage Servicing Inc., et al., Judge Kuntz rejected a "mass action" attempt by hundreds of borrowers, finding that they were joined improperly and that, more importantly, the bases for their complaint were "threadbare recitals" and "conclusory statements" unsupported by specific facts. "Mass action" is defined as any civil action in which monetary relief claims of 100 or more persons are proposed to be tried together on the grounds that the plaintiffs' claims involve common question of law or fact. "[T]his Court finds Plaintiffs have failed to 'plead sufficient factual matter' ... to 'state a claim to relief that is plausible on its face,'" Judge Kuntz wrote. He further held that "[p]laintiffs' unsupported and speculative allegation that Defendants conspired  with one another is insufficient to establish a related series of transactions or occurrences so as to permit joinder. This Court therefore finds that Plaintiffs' claims are misjoined ..." Judge Kuntz granted the defendants' motion to sever and dismiss without prejudice all Plaintiffs except the first named plaintiff, Abraham, whose complaints he subsequently dismissed in their entirety. "Judge Kuntz's ruling clearly established that borrowers who engaged in separate loan transactions by different lenders generally cannot be joined in a single action," MERSCORP Holdings Director for Corporate Communications Jason Lobo said. "As importantly, he found that none of the allegations were supported by a single fact and further rejected an attempt to amend the complaint a third time as 'futile.'"
Published
May 31, 2013
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