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Quiet Title

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?

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In this article:
  • 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.

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:



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.




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  • ER
    Lehigh Acres, FL,
    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.
    • SC
      Sunriver, Oregon,
      Dec, 2013
      Really, who enforces all these fine rules?
    • BA
      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.
  • MW
    mary ,
    Kansas City, MO,
    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.
    • BA
      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.
  • BJ
    Leander, TX,
    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?
  • SJ
    Sheboygan, WI,
    Jan, 2011
    How do you find a lawyer who has experience in litigating quiet title cases? In Wisconsin, for example. Any recommendations?
    • BA
      Jan, 2011
      The law field is like the medical field in that practitioners specialize. First, ask your friends and family if they have a recommendation. If they have not worked with a lawyer who has property experience, ask if they have any recommendation to offer, and call that lawyer. The law community is small, and most lawyers are happy to recommend colleagues they respect. Second, call your county bar association and ask if it has a list of property law specialists. Third, enter "quiet title your state" into a search engine and read the arguments and court filings of lawyers doing quiet title work in your state. Finally, see the resource Find Attorney to learn what questions to ask lawyers you are considering.
    • EJ
      T/o North Bergen, NJ,
      May, 2013
      We are considering filing a quiet title in NJ, and need input. In 2002, we obtained a $460,000 mortgage from a major bank. It was recorded at the county register's office. In 2009 we obtained a new, $598,798 mortgage from Lend America, which was recorded as well. Lend America was involved in fraudulent mortgage matters and the the Government National mortgage was assigned the mortgage in 2012. Loan Care was assigned to service the mortgage.

      My question is, the first bank failed to provide Lend America a release of the lien, and Lend America failed to obtain a release of the lien. In addition, HUD provided us with a loan modification in 2010 and they failed to discover the lack of a filing by the two lenders above and they failed to provide a lien on the modification. Hence, we are trying to sell the property and the title company discovered the records showing we still owe the original mortgage in the amount of $460,000 and the modification loan along with this loan was never recorded. Is this grounds for filing a quiet title?
    • BA
      May, 2013
      My first and last thought here is to recommend you consult with a New Jersey lawyer who has experience litigating quiet title actions. I am not a New Jersey lawyer, and I lack experience with the peculiarities of your state's property laws, which makes me incompetent to offer you legal advice.

      New Jersey is considered a lien theory state by some commentators, but in fact the New Jersey statutes allow the title to shift from the homeowner/borrower to the lender upon default automatically. I mention this because I do not know what impact this has on a situation where there are several defects in how your lenders filed (or failed to file) their interests in your property.

      There is no harm in your consulting with one or two lawyers who have quiet title experience to learn your rights. Usually, these cases hinge on details, and a lawyer who treks down to your county recorder's office to review your title documents in person will be better able to explain where you stand than an Internet commentator like me.