Daily Archives: April 29, 2011

The MERS Decision Story

Fallout from the Michigan Court of Appeals decision tossing out two foreclosures by MERS is sweeping the state of Michigan.

Had a call yesterday from someone whose closing was canceled at the last minute, because, MERS had done the foreclosure and quit claimed the property to the bank, which had agreed to sell the home to the caller.

My realtor wife advised me title companies across Michigan are backing out of deals and canceling closings.

Because, if a MERS foreclosure is in the chain of title, it is, as they say in the title business, “clouded.”

In my caller’s case, MERS foreclosed, the homeowners left and bought a new house, the redemption period expired, the

bank sold the house.

But, under the Michigan Court of Appeals decision, the former homeowner could sue to get the foreclosure sale set aside, putting the home back into his name.

And he would win.

So, title companies, who issue insurance guaranteeing to the buyer, and the buyer’s mortgage company, that the seller does indeed have good title to the property.

No title policy, no mortgage; no mortgage, no sale.

No telling how far back this can go, what if MERS foreclosed 3, 5, even ten years ago?

Not sure off the top of my head how long they have been around.

I have been blogging about MERS for years.

As filing fees for real estate documents increased, the mortgage companies decided to skip paying those annoying fees every time they bought a mortgage.

They had to pay to have it recorded with the county register of deeds, to put the world on notice that there was a lien on the property.

So, the initial mortgage was recorded in the name of MERS, as “nominee,” whatever that is, for the actual mortgage company.

Then, every time the mortgage was sold or assigned, nothing else was recorded with the county, just on MERS records.

So, MERS had no actual interest in the mortgages, could not collect any money due on them, and, that is why the court threw out the foreclosures last week.

 

The MERS Decision Story

One Response to The MERS Decision Story

  1. I heard on the news and read your article about the mers forclosurer ruling. My home is going to the county sheriff sale this month. My question is how do i find out it my forcloser will de delayed because of the ruling? Also i found that it to be quiet strange that my servers name is on my mortgage documents but the server tells me that I borrowed money from the investers. I dont no who the investers are and upon getting approved for the loan I contacted the credit union. I assume the credit union provided the funds for me. Since this time the credit union is closed and now coop credit union. I contacted coop and first they told me they didnt have my mortgage. After speaking to several people the manager tells me that yes coop does have the mortgage but its not in their computer its in their books. Should the credit union contacted me upon recieving my mortgage, do the server have a right to be listed as the leinholder on my mortgage even if they didnt loan me the funds, and do I have some type of claim?