Edelstein v. Bank of New York Mellon
128 Nev. 505
| Nev. | 2012Background
- Edelstein signed a note to New American Funding to buy a home; deed of trust named MERS as beneficiary and nominee for lender and successors.
- Note was transferred along with endorsements; deed of trust and assignment chain later showed MERS as beneficiary while New American Funding remained the note holder.
- ReconTrust held the note (endorsed in blank) and the deed-of-trust assignment naming BNY Mellon as beneficiary at mediation.
- Arizona foreclosure mediation occurred under Nevada’s Foreclosure Mediation Program (FMP); mediation concluded without modification or resolution.
- Edelstein challenged BNY Mellon’s standing to foreclose, arguing split between note and deed and lack of authority; the district court issued two orders allowing the FMP certificate process to proceed.
- Court addresses whether MERS designation irreparably splits note and deed and whether BNY Mellon could enforce both instruments to foreclose.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a party may foreclose in FMP only if it is the current beneficiary and current holder. | Edelstein argues BNY Mellon lacks standing due to split note/deed. | BNY Mellon contends it is proper beneficiary and holder through assignments. | Yes; standing requires current beneficiary and current note holder. |
| Whether MERS designation irreparably splits the note and deed precluding foreclosure. | Edelstein argues MERS as nominee creates irreparable split. | BNY Mellon argues MERS can act as agent/beneficiary without fatal split. | Split is not irreparable; reunification cures the issue when same party holds both. |
| Whether BNY Mellon is entitled to enforce both the note and the deed of trust. | Edelstein contends no enforceable chain of title to foreclose. | BNY Mellon asserts valid transfer and reunification through MERS and endorsements. | BNY Mellon entitled to enforce both note and deed; foreclose accordingly. |
| Whether the documents produced establish authority to foreclose and attend mediation. | Edelstein argues lack of proper authority evidence. | BNY Mellon/servicer shown authority through recorded assignments and representation. | Authority shown; no abuse of discretion. |
Key Cases Cited
- Leyva v. National Default Servicing Corp., 127 Nev. 470 (Nev. 2011) (requires proper transfer evidence to foreclose and unify note and deed)
- Cervantes v. Countrywide Home Loans, Inc., 656 F.3d 1034 (9th Cir. 2011) (notes that note and deed must be held together to foreclose; MERS agency/beneficiary)
- In re Agard, 444 B.R. 231 (Bankr. E.D.N.Y. 2011) (discusses MERS as beneficiary and note holder separation)
- In re Tucker, 441 B.R. 638 (Bankr. W.D. Mo. 2010) (recognizes agency relationship and reunification concept)
- U.S. Bank Nat. Ass’n v. Ibanez, No. Mass. (2011) (Mass. 2011) (discusses consequences of split note/deed)