MICHIGAN: FORECLOSURE REVERSED — MERS NOT THE OWNER OF ANYTHING

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EDITOR’S COMMENT: This case is very significant despite the apparent narrow ruling on advertisement. The reason it is important is that the reason the court decided to reverse the foreclosure, reverse the sale and stop the eviction action, was that MERS was and is by definition a non-existent entity in the chain of title — something we have been saying here for years.

The High Court realized without much difficulty that you might just as well put the name Donald Duck in the Deed of Trust or mortgage as beneficiary or mortgagee, because the express wording of the document makes it clear that it is a shield to hide multiple other transactions, thus depriving the world from knowing the identity of the creditor. This means that nobody knows who can sign a satisfaction of mortgage, except by accepting the word of some third party who had nothing to do with the original transaction. The High Court in Michigan keeps it simple and states that using such subterfuge does not qualify you to run around the requirements of law.

Now the question is what to do about all those foreclosures that already did happen. The Court has an answer for that too in this well-written opinion. The subsequent sale to a third party after the auction is void. That was easy for the Court, because the auction sale was itself improper and void. The issuance of a deed upon a false “credit bid’ is a wild deed to be ignored in the title chain.

STATE OF MICHIGAN
COURT OF APPEALS

RESIDENTIAL FUNDING CO, LLC, f/k/a
RESIDENTIAL FUNDING CORPORATION,

Plaintiff-Appellee,

v

GERALD SAURMAN,

Defendant-Appellant.

BANK OF NEW YORK TRUST COMPANY,

Plaintiff-Appellee,

v

COREY MESSNER,

Defendant-Appellant.

Before:  WILDER, P.J., and SERVITTO and SHAPIRO, JJ.

SHAPIRO, J.

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 MCL 600.3204(1)(d)  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 MCL 600.3204(1)(d) and, therefore, may not foreclose by advertisement.

CONCLUSION
Defendants were entitled to judgment as  a matter of law because, pursuant to MCL 600.3204(1)(d), 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 ab initio.  Thus, the circuit courts improperly affirmed the district courts’ decisions to proceed with eviction based upon the foreclosures of defendants’ properties.

In both Docket No. 290248 and 291443, we reverse the circuit court’s affirmance of the district court’s orders, vacate the foreclosure  proceedings, and remand for further proceedings consistent with this opinion.  We do not retain jurisdiction. Defendants, as the prevailing parties, may tax costs.  MCR 7.219(A).

Tags: bankruptcy, borrower, disclosure, foreclosure, foreclosure defense, foreclosure offense, fraud, MERS, securitization, TILA audit, trustee
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