Thursday, November 17, 2011

Michigan Supreme Court OK's Foreclosure By MERS

The Michigan Supreme Court has ruled that it is legal for Mortgage Electronic Registration Systems (MERS) to foreclose by advertisement.  The ruling overturns a prior Appeals Court decision.  MERS was developed as a way to keep track of the servicing rights on home loans.  Though MERS is not a lender, they foreclosed on properties as an agent for lenders.  The Appeals Court had ruled that MERS did not meet the requirements under state statute to foreclose by advertisement. The decision threw thousands of foreclosures into question and caused many title companies to cancel closings due to concerns about insuring the title on a bank-owned home involving MERS.  But the Michigan Supreme Court ruled that MERS has an interest in the debt and acted properly under Michigan law.

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