Niday v. GMAC Mortgage, LLC

The beneficiary of a trust deed is the party to whom the obligation is owed. Under ORS 86.735 any assignment of a beneficial interest in a trust deed must be recorded in the county mortgage records.

Niday appealed the trial court’s decision anointing MERS as the beneficiary of a trust deed per the Oregon Trust Deed Act. In Oregon, a trust deed is deemed to be a mortgage on real property subject to all law relating to mortgages; however the trustee may foreclose on a trust deed without judicial process if: (1) The trust deed is recorded; (2) the grantor defaults; (3) the trustee has filed for record a notice of default; and (4) no action has been instituted to recover the debt. MERS was developed by mortgage industry participants to expedite multiple transfers of beneficial interests in property. When a member originates a home loan, MERS is named as the beneficiary of the trust deed. Plaintiff obtained a home loan from GreenPoint, a MERS member. Niday executed a trust deed in which GreenPoint was named as the lender and MERS was named as the beneficiary. ORS 86.705 defines “beneficiary” as the person designated in a trust deed as the person for whose benefit a trust deed is given. The Court of Appeals held that because GreenPoint is the party to whom Niday owed the obligation that was secured by the trust deed, there was evidence that GreenPoint transferred its interest. However, there was no evidence that the assignment was recorded. Thus, the trial court erred in granting summary judgment for GMAC Mortgage because nonjudicial foreclosure processes are not available to a party that does not publicly record assignments. Reversed and remanded.