Court Opinion

ID: 820681
Source: CourtListenerOpinion
Date Created: 2013-02-15 19:44:35.950356+00
Date Added: 2024-06-11T15:23:08.970846
License: Public Domain

United States Court of Appeals
                      For the First Circuit

No. 12-1285

                         ORATAI CULHANE,

                      Plaintiff, Appellant,

                                v.

                AURORA LOAN SERVICES OF NEBRASKA,

                       Defendant, Appellee.

          APPEAL FROM THE UNITED STATES DISTRICT COURT

                FOR THE DISTRICT OF MASSACHUSETTS

          [Hon. William G. Young, U.S. District Judge]

                              Before

                       Lynch, Chief Judge,
                   Souter,* Associate Justice,
                    and Selya, Circuit Judge.

     George E. Babcock, with whom Rockwell P. Ludden and Ludden
Kramer Law P.C. were on brief, for appellant.
     Reneau J. Longoria, with whom John A. Doonan, Erin P. Severini
and Doonan, Graves & Longoria, LLC were on brief, for appellee.

                        February 15, 2013

__________
   * Hon. David H. Souter, Associate Justice (Ret.) of the Supreme
Court of the United States, sitting by designation.
            SELYA, Circuit Judge. As the millennium dawned, American

financial markets soared to new heights.           One of the vehicles that

propelled    this   dizzying     flight      involved    the    bundling    and

securitization of residential mortgage loans.1 But all good things

come to an end, cf. Geoffrey Chaucer, Troilus and Criseyde (circa

1374) ("There is an end to everything, to good things as well."),

and it was not long before the economy faltered and the housing

bubble   burst.     A   rash    of   residential    mortgage     foreclosures

followed.

            Novel   practices    had    been   devised   to    facilitate   the

bundling and securitization of residential mortgage loans — and

those practices gave rise to hitherto unanswered questions in the

foreclosure context.      The fact pattern here is emblematic: the

mortgagor's note was delivered to one party (the lender) and then

transferred; the mortgage itself was granted to a different entity,

Mortgage Electronic Registration Systems, Inc.,2 and later assigned

to the foreclosing entity.           We are asked, as a matter of first

     1
      Generally speaking, securitization is the process of pooling
financial assets such as loans or accounts receivable to create an
investment instrument (i.e., a security). Thus, the securitization
of mortgage loans involves the creation of a mortgage-backed
security: mortgage loans are purchased from lenders, bundled, and
combined to create a single debt instrument. Interests in this
instrument can then be sold to investors who enjoy the benefit of
the revenue stream flowing from the mortgage payments.
     2
        Mortgage Electronic Registration Systems, Inc. is a
subsidiary of MERSCORP, Inc. Both are Delaware corporations based
in Virginia. For simplicity's sake, we refer to them collectively
as "MERS."

                                       -2-
impression for this court, to pass upon not only the legality and

effect of this arrangement but also the mortgagor's right to

challenge it.     The substantive law of Massachusetts controls our

inquiry.

            After careful consideration, we conclude that, in the

circumstances of this case, the mortgagor has standing to contest

the validity of the mortgage assignment made by MERS to the

foreclosing entity.     We also conclude, however, that the MERS

framework is faithful to the age-old tenets of mortgage law in

Massachusetts and that, therefore, the foreclosure here was not

unlawful.

I.   BACKGROUND

            The relevant facts are essentially undisputed.   In April

of 2006, plaintiff-appellant Oratai Culhane refinanced the mortgage

on her single-family home in Milton, Massachusetts.   To accomplish

this refinancing, she delivered a promissory note in the face

amount of $548,000 to the lender, Preferred Financial Group, Inc.,

doing business as Preferred Mortgage Services (Preferred).       She

simultaneously executed a separate mortgage indenture in favor of

MERS as "nominee for [Preferred] and [Preferred]'s successors and

assigns."    This mortgage, which secured the promissory note, was

recorded on April 11, 2006 in the Norfolk County Registry of Deeds.

                                 -3-
            Under the terms of the mortgage, MERS, as mortgagee of

record, held legal title to the mortgaged premises.              As such, it

enjoyed a power of sale "solely as nominee" for the lender.

            At this juncture, we think it helpful to provide some

background about the mysterious entity known as MERS. We introduce

this subject with a riddle: What entity is not a bank but claims to

hold title to approximately half of all the mortgaged homes in the

country?     The answer is MERS.         See Michael Powell & Gretchen

Morgenson, MERS? It May Have Swallowed Your Loan, N.Y. Times, Mar.

6, 2011, at BU1.

            MERS was formed by a consortium of residential mortgage

lenders    and   investors   desiring    to   streamline   the   process   of

transferring ownership of mortgage loans in order to facilitate

securitization. See Christopher L. Peterson, Foreclosure, Subprime

Mortgage Lending, and the Mortgage Electronic Registration System,

78 U. Cin. L. Rev. 1359, 1368-69 (2010). Various entities involved

in the residential mortgage lending business can become "members"

of MERS.   As such, they pay an annual fee and agree to the rules of

membership. Lender members may name MERS as mortgagee in mortgages

that they originate, service, or own.

            MERS's mortgagee status is narrowly circumscribed: it

acts solely as "nominee" for the owner or servicer of the mortgage,

including the owner's or servicer's successors and assigns.            There

is one condition: the party for whom MERS serves as nominee must be

                                   -4-
a member of MERS.     The upshot of this arrangement is that MERS

holds the legal title to the mortgage as mortgagee of record, but

it does not have any beneficial interest in the loan.

          MERS maintains an electronic database cataloguing the

mortgages that it holds.    This database tracks the identities of

the noteholders and servicers of the underlying loans. When a note

is sold by one MERS member to another, the sale is memorialized in

the MERS database, and MERS remains the mortgagee of record.

          If a note within the MERS system is sold to a nonmember,

MERS assigns the mortgage to the new noteholder or its designee.

MERS's involvement ends at that point.   To expedite the execution

of assignments, MERS designates "certifying officers."          These

"certifying officers" are typically employees of member firms.

MERS   authorizes   these   persons,   through   formal     corporate

resolutions, to execute assignments on its behalf.        This system

reduces paperwork and avoids fees that otherwise would be required

to record assignments of mortgages at local recording offices.

Similarly, it facilitates the bundling and securitization of loans.

          This case offers a paradigmatic example of how the MERS

framework operates.    After making the loan, Preferred (a MERS

member) subsequently transferred the plaintiff's note to fellow

MERS member Deutsche Bank Trust Company Americas (Deutsche), as

trustee for Residential Accredit Loans Inc., Mortgage Asset-Backed

                                -5-
Pass-Through Certificates, Series 2006-QO5 (RALI 2006 Trust).3

Although the endorsement was undated, the cut-off date for mortgage

loans to be transferred into the RALI 2006 Trust was May 1, 2006,

so the endorsement necessarily took place on or before that date

(the validity of this transfer was unsuccessfully challenged below,

but the plaintiff does not contest it in her appellate briefs).

          At the times relevant hereto, defendant-appellee Aurora

Loan Services of Nebraska (Aurora), acting for Deutsche, had the

responsibility of servicing the loans held in the RALI 2006 Trust.

In an assignment dated April 7, 2009, MERS transferred the mortgage

to Aurora.   This assignment, recorded on April 24, 2009, was

executed by Joann Rein, who is both an employee of Aurora and a

"certifying officer" for MERS.

          When the plaintiff fell behind in her note payments,

Aurora — now both servicer of the note and mortgagee of record —

initiated foreclosure proceedings.     It first filed a complaint in

the Land Court seeking a declaration that the plaintiff was not

entitled to the protections of the Servicemembers Civil Relief Act

(SCRA), 50 U.S.C. app. § 533.    The Land Court ruled that the SCRA

presented no obstacle to Aurora's enforcement of its power of sale.

See Mass. Gen. Laws ch. 183, § 21; id. ch. 244, § 14.

     3
       The RALI 2006 Trust holds a pool of one- to four-family
residential, payment-option, adjustable-rate, first-lien mortgage
loans with a negative amortization feature.

                                 -6-
            Next, Aurora published a notice of intent to foreclose

the mortgage and sent copies of this notice to all the required

parties.    See id. ch. 244, § 14.          The foreclosure, originally set

for October 22, 2009, was postponed from time to time due to the

plaintiff's    requests     for    loan      modifications   under   the    Home

Affordable Modification Program, 12 U.S.C. § 5219a, and a series of

abortive bankruptcy proceedings.            When these hurdles were cleared,

the foreclosure was set for June 20, 2011.

            Three   days    before    the     rescheduled    foreclosure,   the

plaintiff   repaired   to    the     state    superior   court   seeking    both

injunctive relief and monetary damages.                  Citing diversity of

citizenship and the existence of a controversy in the requisite

amount, Aurora removed the case to the federal district court. See

28 U.S.C. §§ 1332(a), 1441.          It then moved for summary judgment.

After some preliminary skirmishing, the inquiry narrowed to the

question of how, if at all, MERS's involvement in the chain of

title impacted Aurora's authority to foreclose. The district court

resolved this question in favor of Aurora.            Culhane v. Aurora Loan

Servs., 826 F. Supp. 2d 352, 378-79 (D. Mass. 2011).

            On December 8, 2011 — ten days after the district court

entered summary judgment — Aurora foreclosed the mortgage on the

plaintiff's property by entry and sale, purchasing the property for

$490,000.

                                       -7-
II.   ANALYSIS

            In Massachusetts, when a mortgage includes a power of

sale — as this mortgage does — the mortgagee "may foreclose without

obtaining prior judicial authorization 'upon any default in the

performance or observance' of the mortgage, including, of course,

nonpayment of the underlying mortgage note."              Eaton v. Fed. Nat'l

Mortg. Ass'n, 969 N.E.2d 1118, 1127 (Mass. 2012) (footnote and

internal citation omitted) (quoting Mass. Gen. Laws ch. 183, § 21).

The Massachusetts Supreme Judicial Court (SJC) recently interpreted

the   statutes      governing   foreclosure      by     sale    as    requiring    a

foreclosing mortgagee both to control the note (either as the

noteholder or as its agent) and to hold the mortgage.                  Id. at 1129

&   n.20,   1131.      The   SJC    expressly    stated        that   this   binary

requirement      constituted    a   new     statutory     interpretation      and,

therefore, was to be given only prospective effect.                    See id. at

1132-33; accord McKenna v. Wells Fargo Bank, 693 F.3d 207, 215 (1st

Cir. 2012).

            In the case at hand, the plaintiff does not contest that,

at the time of the foreclosure, Deutsche held her note and that

Aurora was properly denominated as the Deutsche loan servicer.                    At

that time, the mortgage stood in Aurora's name — but the plaintiff

does not concede the validity of the assignment from MERS to

                                      -8-
Aurora.   Our inquiry, therefore, focuses on the validity of that

assignment.4

          There is, however, a threshold issue.                Because Aurora

insists that the plaintiff lacks standing to challenge the validity

of the assignment to Aurora, we start with this issue.

                                A.   Standing.

          Whether      a   mortgagor    has   standing    to   challenge   the

assignment of her mortgage — an assignment to which she is not a

party and of which she is not a third-party beneficiary — is a

matter of first impression for this court.          The nisi prius courts

within the circuit have expressed divergent views.             Compare, e.g.,

Butler v. Deutsche Bank Trust Co., No. 12-10337, 2012 WL 3518560,

at *6-7 (D. Mass. Aug. 14, 2012) (holding that mortgagor has

limited standing), with, e.g., Oum v. Wells Fargo, 842 F. Supp. 2d

407, 415 (D. Mass. 2012) (holding that mortgagor lacks standing),

with, e.g., Rosa v. Mortg. Elec. Sys., Inc., 821 F. Supp. 2d 423,

429 n.5 (D. Mass. 2011) (holding that mortgagors "appear to have

standing").      We conclude that a nonparty mortgagor, like the

plaintiff,     has   standing   to   raise    certain    challenges   to   the

assignment of her mortgage.

          "The existence vel non of standing is a legal question

and, therefore, engenders de novo review."          Me. People's Alliance

     4
       Because we resolve this question in favor of Aurora, see
text infra, we need not dwell on the purely prospective effect of
the SJC's decision in Eaton.

                                       -9-
& Natural Res. Def. Council v. Mallinckrodt, Inc., 471 F.3d 277,

283 (1st Cir. 2006). The Constitution limits the judicial power of

federal courts to actual cases and controversies. U.S. Const. art.

III, § 2, cl. 1.          This criterion is satisfied only when the

plaintiff   has   "such    a   personal    stake    in   the   outcome   of    the

controversy as to assure that concrete adverseness which sharpens

the   presentation   of    issues   upon    which    the   court   so    largely

depends."    Baker v. Carr, 369 U.S. 186, 204 (1962).

            When a plaintiff sues in a federal court, she ordinarily

must shoulder the burden of establishing standing.                  Bennett v.

Spear, 520 U.S. 154, 167-68 (1997).         The onus remains the same when

— as in this case — the plaintiff sues in state court and the

defendant invokes federal jurisdiction through removal.                       Once

removal has been effected, the burden of going forward with the

claim in federal court (including the burden of establishing

standing) still rests with the plaintiff.                See DaimlerChrysler

Corp. v. Cuno, 547 U.S. 332, 342 n.3 (2006).

            The essence of standing is that a plaintiff must have a

personal stake in the outcome of the litigation.                   Ramírez v.

Sánchez Ramos, 438 F.3d 92, 97 (1st Cir. 2006).                To fulfill this

personal stake requirement, the plaintiff "must establish each part

of a familiar triad: injury, causation, and redressability."                  Katz

v. Pershing, LLC, 672 F.3d 64, 71 (1st Cir. 2012) (citing Lujan v.

                                    -10-
Defenders of Wildlife, 504 U.S. 555, 560-61 (1992)).                  We examine

these three elements as they relate to this litigation.

           For purposes of standing doctrine, an injury is defined

as "an invasion of a legally protected interest which is (a)

concrete and particularized; and (b) actual or imminent, not

conjectural or hypothetical." Lujan, 504 U.S. at 560 (footnote and

internal citations and quotation marks omitted).                 The foreclosure

of   the   plaintiff's     home    is     unquestionably     a    concrete     and

particularized injury to her.

           By the same token, there is a direct causal connection

between the challenged action and the identified harm.                The action

challenged here relates to Aurora's right to foreclose by virtue of

the assignment from MERS.         The identified harm — the foreclosure —

can be traced directly to Aurora's exercise of the authority

purportedly delegated by the assignment.

           This   leaves    the    matter      of   redressability.      We    are

confident that a determination that Aurora lacked the authority to

foreclose would set the stage for redressing the plaintiff's

claimed injury.      Her complaint, at least in part, prays for

monetary damages as a means of ameliorating the asserted wrong. No

more is exigible.    See Plains Commerce Bank v. Long Family Land &

Cattle Co., 554 U.S. 316, 327 (2008).

           Of   course,    standing      has   a    prudential    aspect,    which

overlays its constitutional dimensions.               See Coggeshall v. Mass.

                                        -11-
Bd. of Registration of Psychologists, 604 F.3d 658, 666 (1st Cir.

2010).      These prudential considerations "ordinarily require a

plaintiff to show that his claim is premised on his own legal

rights (as opposed to those of a third party), that his claim is

not merely a generalized grievance, and that it falls within the

zone   of   interests   protected   by     the   law   invoked."      Pagán   v.

Calderón, 448 F.3d 16, 27 (1st Cir. 2006).             As applied here, these

considerations    raise   a   potential     question     as   to   whether    the

plaintiff's standing is jeopardized by the prudential concern that

a litigant should not normally be permitted to assert the rights

and interests of a third party.      With this in mind, several courts

have ruled that mortgagors lack standing to challenge mortgage

assignments because they are neither parties to nor third-party

beneficiaries of the assignments.          See, e.g., Oum, 842 F. Supp. 2d

at 413 (citing Edelkind v. Fairmont Funding, Ltd., 539 F. Supp. 2d

449, 453-54 (D. Mass. 2008)); Wenzel v. Sand Canyon Corp., 841 F.

Supp. 2d 463, 477-78 (D. Mass. 2012).

            We think that these cases paint with too broad a brush.

It is true that a nonparty who does not benefit from a contract

generally lacks standing to assert rights under that contract.

See, e.g., Almond v. Capital Props., Inc., 212 F.3d 20, 24 & n.4

(1st Cir. 2000); Cumis Ins. Soc'y, Inc. v. BJ's Wholesale Club,

Inc., 918 N.E.2d 36, 44 (Mass. 2009).             But a Massachusetts real

property mortgagor finds herself in an unusual position because of

                                    -12-
two   key   facts.      First,   as   explained     below,   a    Massachusetts

mortgagor has a legally cognizable right under state law to ensure

that any attempted foreclosure on her home is conducted lawfully.

See Mass. Gen. Laws ch. 183, § 21; id. ch. 244, § 14.                  Second,

where (as here) a mortgage contains a power of sale, Massachusetts

law permits foreclosure without prior judicial authorization.               See

Eaton, 969 N.E.2d at 1127.        Thus — unlike an ordinary debtor who

could challenge an assignment as a defense upon being haled into

court by the assignee seeking to collect on her debt, see 6A C.J.S.

Assignments § 132 (2012) — a Massachusetts mortgagor would be

deprived of a means to assert her legal protections without having

standing    to   sue.    As   such,   we     hold   only   that   Massachusetts

mortgagors, under circumstances comparable to those in this case,

have standing to challenge a mortgage assignment.

            The relevant statutory provisions explicitly state that

only a mortgagee has the authority to exercise the statutory power

of sale.    The SJC has gone so far as to state that "[a]ny effort to

foreclose by a party lacking jurisdiction and authority to carry

out a foreclosure under these statutes is void."              U.S. Bank Nat'l

Ass'n v. Ibanez, 941 N.E.2d 40, 50 (Mass. 2011) (internal quotation

marks omitted).      To this end, an action may be brought to set aside

a void foreclosure.       See Rogers v. Barnes, 47 N.E. 602, 603-04

(Mass. 1897).     This would be the case where, for instance, valid

                                      -13-
legal title was never assigned to the foreclosing entity.                           See

Ibanez, 941 N.E.2d at 50.

              The short of it is that, in Massachusetts, a mortgagor

has a legally cognizable right to challenge a foreclosing entity's

status qua mortgagee.          This may, in certain instances, require

challenging the validity of an assignment that purports to transfer

the mortgage to a successor mortgagee.              Standing doctrine is meant

to   be   a   shield   to   protect     the    court     from   any    role    in   the

adjudication of disputes that do not measure up to a minimum set of

adversarial     requirements.         There    is   no    principled      basis     for

employing standing doctrine as a sword to deprive mortgagors of

legal protection conferred upon them under state law.                         We hold,

therefore,     that    a    mortgagor    has    standing        to    challenge     the

assignment of a mortgage on her home to the extent that such a

challenge is necessary to contest a foreclosing entity's status qua

mortgagee.

              We caution that our holding, narrow to begin with, is

further circumscribed.        We hold only that a mortgagor has standing

to challenge a mortgage assignment as invalid, ineffective, or void

(if, say, the assignor had nothing to assign or had no authority to

make an assignment to a particular assignee).                    If successful, a

challenge of this sort would be sufficient to refute an assignee's

status qua mortgagee.        See 6A C.J.S. Assignments § 132.              Withal, a

mortgagor does not have standing to challenge shortcomings in an

                                        -14-
assignment that render it merely voidable at the election of one

party but otherwise effective to pass legal title.                    See, e.g.,

Serv. Mortg. Corp. v. Welson, 200 N.E. 278, 280 (Mass. 1936);

Murphy v. Barnard, 38 N.E. 29, 31 (Mass. 1894); see also 6A C.J.S.

Assignments § 132.

             In this case, the plaintiff's challenge to the assignment

from MERS to Aurora is premised on the notion that MERS never

properly held the mortgage and, thus, had no interest to assign.

If   this   were   so,   the    assignment    would   be    void    (not    merely

voidable).     Consequently, the plaintiff has standing to challenge

the validity of the assignment.5

                    B.    Validity of the Assignment.

             We turn now to the district court's entry of summary

judgment on the merits.          In performing our review, we are not

shackled to the district court's reasoning but, rather, may uphold

its ruling on any ground made manifest by the record.                See Houlton

Citizens' Coal. v. Town of Houlton, 175 F.3d 178, 184 (1st Cir.

1999).      We look to Massachusetts for the substantive rules of

decision.       Erie     R.R.   Co.   v.     Tompkins,     304     U.S.    64,   78

(1938); B & T Masonry Constr. Co. v. Pub. Serv. Mut. Ins. Co., 382

F.3d 36, 38 (1st Cir. 2004).

      5
       We are confident that this holding is consistent with our
recent decision in Juárez v. Select Portfolio Servicing, Inc., ___
F.3d ___, ___ (1st Cir. 2013) [No. 11-2431, slip op. at 14-15]. In
all events, the standing determination in Juárez rested on the
peculiar facts of that case.

                                      -15-
             The plaintiff's claim hinges on the asseveration that

MERS   did   not       legitimately     hold       the   mortgage   at   the   time    of

assignment and, therefore, had nothing to assign to Aurora.                          Even

though the original mortgage papers designated MERS as the holder

of the mortgage, the plaintiff's thesis runs, this designation was

a nullity because MERS never owned the "'beneficial half' of the

legal interest" in the mortgage.                 We reject this thesis: there is

no reason to doubt the legitimacy of the common arrangement whereby

MERS   holds      bare    legal     title   as     mortgagee   of    record    and    the

noteholder alone enjoys the beneficial interest in the loan.

             The    law    contemplates        distinctions between        the   legal

interest     in    a     mortgage    and    the     beneficial      interest   in     the

underlying debt.          These are distinct interests, and they may be

held by different parties. See Black's Law Dictionary 885 (9th ed.

2009) (defining "beneficial interest" as a "right or expectancy in

something (such as a trust or estate), as opposed to legal title to

that thing").          So it is here: prior to the assignment to Aurora,

MERS held the legal interest and Deutsche held the beneficial

interest.

             We add that — short of the time of foreclosure — the MERS

framework, which customarily separates the legal interest from the

beneficial     interest,      corresponds          with    longstanding    common-law

principles regarding mortgages.                    A mortgage loan involves the

borrowing of money by one party, who secures the loan by means of

                                            -16-
a mortgage on a piece of property.            It requires the execution of

two separate, but related, contracts: a promissory note and a

mortgage.     Eaton, 969 N.E.2d at 1124.             The note embodies the

borrower's promise to repay the lender (or, in its stead, the

noteholder).    Id.     The mortgage, in a title theory state like

Massachusetts, transfers legal title to the mortgaged premises from

the mortgagor to the mortgagee for the sole purpose of securing the

loan.   Id.   The mortgagee holds bare legal title to the mortgaged

premises, defeasible upon repayment of the loan (because the

mortgagor owns the equity of redemption).            Id.

            In Massachusetts, the note and the mortgage need not be

held by the same entity.         The two instruments exist on separate

planes, and    the    transfer   of   the note      does   not   automatically

transfer the mortgage.     See id. at 1124-25; Lamson & Co. v. Abrams,

25 N.E.2d 374, 378 (Mass. 1940).         But the mortgage (no matter who

holds it) is always subject to the note.          As a hoary maxim teaches,

"the debt is the principal and the mortgage an incident."               Morris

v. Bacon, 123 Mass. 58, 59 (1877).           In other words, the note is the

beneficial interest and the mortgage is the legal interest.                See

id.

            Where — as at the inception of this loan — the mortgage

and the note are held by separate entities, an equitable trust is

implied by law.      Eaton, 969 N.E.2d at 1125 & n.10.            The SJC has

characterized this equitable trust as a kind of resulting trust.

                                      -17-
Id. at 1125 n.10.     Under such an arrangement, the mortgagee is an

equitable trustee who holds bare legal title to the mortgaged

premises in trust for the noteholder. Ibanez, 941 N.E.2d at 53-54.

The noteholder possesses an equitable right to demand and obtain an

assignment of the mortgage.        Id. at 54.   This makes perfect sense:

if the debtor-mortgagor defaults, the noteholder needs to control

the   mortgage   in   order   to   enforce   its   bargained-for   security

interest and collect the debt.

           Absent a provision in the mortgage instrument restricting

transfer — and there is none here6 — a mortgagee may assign its

mortgage to another party.          Because such an assignment is an

interest in land, it requires a writing signed by the assignor.

See Mass. Gen. Laws ch. 183, § 3; Ibanez, 941 N.E.2d at 51.          In the

same vein, a noteholder may transfer the note to another.              See

U.C.C. §§ 3-205, 3-301.        An equitable trust exists between the

mortgagee of record and the new noteholder, as such a trust is

always implied by Massachusetts law. See Eaton, 969 N.E.2d at 1125

n.10; Ibanez, 941 N.E.2d at 53-54.

      6
       The plaintiff suggests that a mortgage provision concerning
notice to the borrower would be breached if the mortgagee
transferred the mortgage without the note. This provision states:
"[t]he Note or a partial interest in the Note (together with this
Security Instrument) can be sold one or more times without prior
notice to the Borrower."    This suggestion is jejune.     For one
thing, this language is permissive and by no means prohibits the
separation of the two instruments.        For another thing, the
instruments were separated upon their inception: Preferred was
granted the note and MERS the mortgage.

                                    -18-
           The plaintiff's argument cannot overcome these venerable

precedents. Massachusetts law makes pellucid that the mortgage and

the note are separate instruments; when held by separate parties,

the mortgagee holds a bare legal interest and the noteholder enjoys

the beneficial interest.        See Eaton, 969 N.E.2d at 1124.           The

mortgagee need not possess any scintilla of a beneficial interest

in order to hold the mortgage.7       Thus, MERS's role as mortgagee of

record and custodian of the bare legal interest as nominee for the

member-noteholder, and the member-noteholder's role as owner of the

beneficial interest in the loan, fit comfortably with each other

and fit comfortably within the structure of Massachusetts mortgage

law.

           Here, moreover, MERS had the authority twice over to

assign the mortgage to Aurora.         This authority derived both from

MERS's status as equitable trustee and from the terms of the

mortgage contract.       We already have explained the question of the

resulting trust that arises in this context.         See text supra.      We

explain below how the terms of the mortgage contract replicate this

authority.

           The   terms    of   the   mortgage   contract,   to   which   the

plaintiff expressly agreed, authorize the transfer to Aurora.            The

       7
       The SJC has made clear that it is only at the time of
foreclosure that a mortgagee must also hold or control the
beneficial interest in the loan. See Eaton, 969 N.E.2d at 1121,
1125-31, 1132 n.27.

                                     -19-
mortgage papers denominated MERS as mortgagee "solely as nominee

for [Preferred] and [Preferred]'s successors and assigns."     Under

Massachusetts law, a nominee in such a situation holds title for

the owner of the beneficial interest. See Morrison v. Lennett, 616

N.E.2d 92, 94-95 (Mass. 1993); Black's Law Dictionary 1149.     MERS

originally held title as nominee for Preferred; Preferred assigned

its beneficial interest in the loan to Deutsche; and Deutsche

designated Aurora as its loan servicer.        MERS was, therefore,

authorized by the terms of the contract to transfer the mortgage at

the direction of Aurora.

             In the assignment, MERS transferred to Aurora what it

held: bare legal title to the mortgaged property.8     That transfer

was valid.    See Eaton, 969 N.E.2d at 1124.   It follows that Aurora

properly held the mortgage and thus possessed the authority to

foreclose.     Mass. Gen. Laws ch. 183, § 21; id. ch. 244, § 14; see

Eaton, 969 N.E.2d at 1124, 1129; Ibanez, 941 N.E.2d at 53.

             In an effort to change the trajectory of the debate, the

plaintiff makes a two-pronged argument.         We find both prongs

unedifying.

     8
       The language of the assignment might be read to suggest that
MERS also purposed to assign the note. It is plain, however, that
MERS never held the note. We need not probe this point because
this superfluous language does not affect the validity of the
transfer of legal title to the mortgaged property. See Deutsche
Bank Nat'l Trust Co. v. Cicchelli, Nos. 10 MISC. 423350, 10 MISC.
436809, 2011 WL 3805905, at *3 n.9 (Mass. Land Ct. Aug. 24, 2011).

                                 -20-
            Both aspects of the plaintiff's argument are offered in

support of the proposition that the assignment to Aurora does not

comply with Mass. Gen. Laws ch. 183, § 54B.           This statute provides

in pertinent part:

            [An] assignment of mortgage . . . if executed
            before a notary public, . . . by a person
            purporting to hold the position of president,
            vice president, treasurer, clerk, secretary,
            cashier,   loan   representative,   principal,
            investment, mortgage or other officer, agent,
            asset manager, or other similar office or
            position, including assistant to any such
            office or position, of the entity holding such
            mortgage, or otherwise purporting to be an
            authorized signatory for such entity . . .
            shall be binding upon such entity and shall be
            entitled to be recorded . . . .

Id.    The assignment of the mortgage from MERS to Aurora adhered to

these requirements: it was signed by Joanne Rein (an individual

duly   certified     as   a   vice   president   of   MERS)    and   thereafter

notarized.

            To be sure, Rein's primary occupation at the time was as

an employee of Aurora.        Her designation as a vice president of MERS

was put in place purely as a matter of administrative convenience.

The plaintiff suggests that this duality somehow undermines the

legitimacy of Rein's status as a certifying officer.

            This suggestion is little more than wishful thinking.

The Massachusetts statute neither places restrictions on who may be

elected    as   an   officer    of   the   assignor   nor     imposes   special

requirements (say, regular employment) on who may serve as a vice

                                      -21-
president of an assignor corporation.             While MERS's practice of

appointing employees of member firms as certifying officers can be

disparaged on policy grounds, such policy judgments are for the

legislature, not the courts.             As the Supreme Court explained,

"[c]ourts may not create their own limitations on legislation, no

matter how alluring the policy arguments for doing so."              Brogan v.

United States, 522 U.S. 398, 408 (1998).

            The second prong of the plaintiff's argument posits that

MERS was not the "entity holding such mortgage" within the purview

of section 54B.    But this is simply an old wine in a new bottle: we

already have refuted the substance of this argument, see text

supra, and we see no point in decanting it again.

            We need not paint the lily. We conclude, without serious

question, that MERS validly held the mortgage on the plaintiff's

premises at the time of the assignment to Aurora.                This leads to

two further conclusions: the assignment was valid, and Aurora

properly exercised the statutory power of sale as both the holder

of the mortgage and the loan servicer for the noteholder.                  See

Mass. Gen. Laws ch. 183, § 21; id. ch. 244, § 14; Eaton, 969 N.E.2d

at 1129.

                    C.    Constitutional Challenges.

            In a last-ditch effort to turn the tables, the plaintiff

asserts    that   the    transfer   of    her   mortgage   and    the   ensuing

                                    -22-
foreclosure    resulted        in   constitutional     transgressions.         This

assertion is too late and, in all events, has little to commend it.

             The plaintiff raised no constitutional challenges below.

The challenges that she now attempts to advance are therefore

forfeit.     Dávila v. Corporación de P.R. para la Difusión Pública,

498 F.3d 9, 14 & n.2 (1st Cir. 2007).              Accordingly, our review is

for plain error.        Tasker v. DHL Ret. Sav. Plan, 621 F.3d 34, 40

(1st Cir. 2010).

             There   is   no    error    here,    plain   or   otherwise.       The

plaintiff claims that the district court's application of section

54B violated her procedural and substantive due process rights and

her right to equal protection by (i) denying her the opportunity to

determine whether the assignment to Aurora was valid and (ii)

arbitrarily including her in a class of mortgagors whose mortgages

were assigned by the actual holder.              In the last analysis, these

remonstrances are contingent on the plaintiff's core contention

that MERS did not validly hold the mortgage at the time of its

assignment to Aurora.          Because we have concluded that MERS validly

held   the   mortgage     at    that    time,    see   supra   Part   II(B),   her

constitutional claims necessarily fail.

                                        -23-
III.       CONCLUSION

               We need go no further.9   For the reasons elucidated

above, we conclude that Aurora's foreclosure of the plaintiff's

property complied with the requirements of applicable law.

Affirmed.

       9
       To the extent (if at all) that the plaintiff has attempted
to advance other arguments, we reject them as incoherent,
unaccompanied by any developed argumentation, or both. See United
States v. Zannino, 895 F.2d 1, 17 (1st Cir. 1990).

                                  -24-