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. 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., and later assigned to
the foreclosing entity. We are asked, as a matter of first 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.
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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.-
