MERS Ruling Causes Closing Cancellations In Michigan

If you're a mobile notary signing agent in Michigan and you've had a rash of purchase closings cancel in the last week or two, here's why: The Michigan Court of Appeals has ruled that The Mortgage Electronic Registration Systems, also known as MERS, does not meet the requirements under state statute to foreclose by advertisement.  That ruling has caused many title companies to cancel closings due to concerns about insuring the title on a bank-owned home involving MERS.

MERS was developed as a way to keep track of the servicing rights on home loans. A property is registered with MERS which allows easier transfer and tracking of a mortgage to a mortgage servicer.  Lenders were foreclosing on homes in MERS name, but the Michigan court ruled that MERS does not own any interest in the debt and therefore does not meet the requirements under state statute to foreclose by advertisement (a foreclosure that goes through the courts is still valid).  The decision could void thousands of foreclosures in Michigan, including properties that have already been sold.  Yikes.