MERS Wins Two Michigan Suits

by devteam March 28th, 2012 | Share

Thernright of Mortgage Electronic Registration System, Inc. (MERS) to act asrnmortgagee of record for mortgage investors has survived two more courtrnchallenges, this time in separate decisions in the U.S. District Court for thernEastern District of Michigan.  In thernfirst case, Collins v. Macomb County Sheriff, JudgernPatrick J. Duggan said MERS assignment of a mortgage to Wells Fargo,  “is plainly satisfactory to establish arnrecord chain of title” required by Michigan’s foreclosure statute.  He cited the Michigan Supreme Court’srndecision in Residential Funding Co., LLC v. Saurman</ithat, as MERS has a right to foreclose by advertisement where it is thernmortgagee as nominee for the lender then MERS was therefore able to assign thernsame right to Wells Fargo.</p

Dugan also cited previous cases in denyingrnthe right of the plaintiffs to even bring the suit on the grounds that “arnlitigant who is not a party to an assignment lacks standing to challenge thatrnassignment.”  The standing of arnplaintiff, usually either the party who was foreclosed or a local governmentrnofficial claiming a usurpation of authority by MERS, has been an issue in whichrnMERS has prevailed in several other states.</p

In the second suit, McLaughlin v. ChasernHome Finance, Judge Lawrence P. Zatkoff rejected the plaintiffs’ claims ofrnfraud, wrongful foreclosure, and violations of the Fair Debt CollectionrnPractices Act (FDCPA) by MERS and Chase Home Finance.   Zatkoff also cited the Saurman</idecision, writing that "MERS is</istatutorily authorized to foreclose by Advertisement…[t]hus, to the extent thatrn[plaintiffs] rely on the Court of Appeals' ruling in Saurman, Plaintiffs’ arguments fail as a matter of law.” Thernjudge also rejected the plaintiffs’ allegations that MERS could not be arnmortgagee, writing that “the Mortgage clearly declares MERS the mortgagee.rnPlaintiffs granted the Property and power of sale to MERS and its successorsrnand assigns. The Mortgage also grants MERS the right to foreclose. MERS in turnrnexecuted an unambiguous document assigning its rights under the Mortgage. rnThus, a record chain of title clearly exists, providing Chase the right tornforeclose.'”

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About the Author


Steven A Feinberg (@CPAsteve) of Appletree Business Services LLC, is a PASBA member accountant located in Londonderry, New Hampshire.

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