The Michigan Court of Appeals issued a decision on April 21, 2011 that will have a major impact on past and present foreclosures in Michigan. The Court held that foreclosures by advertisement started by the Michigan Electronic Registration System (MERS) are against the law. This important decision leaves in question the title to potentially thousands of homes that were previously foreclosed on by MERS in Michigan.
In short, the Michigan Court of Appeals held that MERS is not a proper party to conduct a foreclosure by advertisement under Michigan law. Following is the pertinent portion of the Court’s introduction and conclusion:
These consolidated cases each involve a foreclosure instituted by Mortgage Electronic Registration System (MERS), the mortgagee in both cases. The sole question presented is whether MERS is an entity that qualifies under [Michigan law] to foreclose by advertisement on the subject properties, or if it must instead seek to foreclose by judicial process. We hold that MERS does not meet the requirements of [Michigan law] and, therefore, may not foreclose by advertisement.
Defendants [borrowers] were entitled to judgment as a matter of law because, pursuant to [Michigan law], MERS did not own the indebtedness, own an interest in the indebtedness secured by the mortgage, or service the mortgage. MERS’ inability to comply with the statutory requirements rendered the foreclosure proceedings in both cases void . Thus, the circuit courts improperly affirmed the district courts’ decisions to proceed with eviction based upon the foreclosures of defendants’ properties.
Note the Court’s language: “void ab initio” – in layman’s terms, that means “void from the very beginning”. So, what if MERS foreclosed on your home last year, or the year before? The argument is that you have been wrongfully driven out of your home when you still owned it. That is because MERS’ foreclosure by advertisement was “void from the very beginning”.
If you have been foreclosed on by MERS (or if you don’t know who was involved in your foreclosure), you should find out whether the foreclosure was against the law, and what you can do about it. Call our toll-free number at (888) 487-6150 – we will walk you through a checklist (no cost to you) to determine whether your foreclosure was one of the illegal MERS foreclosures. If it was illegal, we will talk with you about the best way to move forward. Remember, claims like this in Michigan have a “statute of limitations”, so it’s best to check as soon as possible to make sure you don’t lose your rights.