Court rulings may have slammed shut a legal line of attack for Utahns fighting to keep their homes from foreclosure.

Recent decisions by state and federal courts mean that Mortgage Electronic Registration Systems Inc. (MERS), an entity created by the nation’s bankers in the runup to the housing bubble, can continue to foreclose on properties.

“It’s a tragedy,” said Merrill Chandler, executive director of National Association of Foreclosure Defense Advocates, a Salt Lake City-based organization that works with local attorney Craig Smay on foreclosure legal challenges. “It’s kind of like we’ve been kicked in the teeth and gutted and now hung out to dry.”

Last month, the Utah Supreme Court declined to hear the appeal in a foreclosure case, validating a state court of appeals decision that was similar to the findings of the federal 10th Circuit Court of Appeals. The latter ruled last month in three cases against arguments put forward by Smay.

But all may not be lost. Christopher Peterson, a professor and associate dean for academic affairs at the University of Utah’s S.J. Quinney School of Law and a recognized expert in legal issues concerning MERS, said he didn’t view the decisions as major legal milestones.

“For one thing, MERS has already given up as a matter of policy bringing foreclosures in its own name,” he said. “What they’re fighting about now is kind of the leftover dispute that the rest of the country has already moved on from.”

Thousands of Utah homeowners have been hit by foreclosures. About 10,000 default notices, one of the first steps in a foreclosure proceeding, were likely filed in 2011 in Utah, according to RealtyTrac, a California company that compiles real-estate data and that expects to have final figures this week.

The legal decisions affect perhaps dozens of cases in Utah.

“I think their conclusion settled an issue that would have destabilized the [real-estate] markets,” said Tony Kaye, a Ballard Spahr attorney who has represented MERS before the Utah Court of Appeals.

Smay and other attorneys have challenged the legal authority of MERS to foreclose on properties in Utah, which, like other states, has seen an avalanche of foreclosures. They were the result of shoddy lending practices of the past decade that came before the collapse of the housing bubble and the subsequent Great Recession.

In order to facilitate the bundling of mortgages into pools for sale to investors, the Mortgage Bankers Association created MERS in the mid-1990s. Subsequently, MERS was recorded on deeds of trust that secure loans as the mortgage owner and as the agent of the owner.

When the housing bubble burst in 2007, it led to a wave of foreclosures in Utah and subsequent legal challenges from Smay and others about the role of MERS, which they contended circumvented traditional property recording practices.

They argued in dozens of lawsuits that MERS was not authorized under Utah law to foreclose.

The 10th Circuit disagreed.

“By the clear language of the deeds of trust, MERS has the authority to foreclose and sell the property on behalf of both the original lender and the ‘lender’s successors,’ ” U.S. Circuit Judge Bobby Baldock wrote for the court.

Kaye said a decision otherwise could have meant that Utah homeowners’ obligation to pay their mortgages would have disappeared.