May wonders never cease. To my knowledge Michigan is the first NON-judicial state to rule that MERS has no authority to convey interest in indebtendess secured by the mortgage or to service the mortgage.
The Michigan Court of Appeals handed down a ruling on Thursday (April 21, 2011) that would seem to pretty much shut down non-judicial foreclosures by MERS in Michigan. This is probably the most sweeping mortgage foreclosure case since Ibanez and has much more far reaching consequences than any of the other MERS decisions handed down this year. The decision is:
Residential Funding LLC v. Saurman, Case No. 290248, April 21, 2011
The Docket for the case may be found at:
There is also a dissenting opinion at:
The sole question presented in this case was whether MERS is an entity that qualifies under MCL 600.3204(1)(d) to foreclose by advertisement on the subject properties, or it is must instead see to foreclose by judicial process. The Court held that MERS does NOT meet the requirements of MCL 600.3204(1)(d) and, therefore, may NOT foreclose by advertisement. This means a non-judicial foreclosure is not possible on a property ‘held’ by MERS.
There may be tens of thousands of foreclosed borrowers who have been wrongfully dispossessed of their properties. They have been put out of their property, BUT THEY STILL OWN IT, because the non-judicial foreclosure by MERS was actaully a nullity as to its ability to convey valid title. The PURCHASER of these properties at foreclosure sale DOES NOT OWN THE PROPERTY.
In other words, you can’t convey what you never had. While this is a major step forward for protection of homeowners in Michigan, it doesn’t directly address the epidemic of fraudulent assignments to and from MERS. Although, I imagine eventually, this opinion will be cited in future foreclosure actions where the lender was assigned by MERS. I think this is a pretty clear statement that the chain of title has been broken if MERS was involved, which has been our position here at FedUpUSA for 3 years.