MERS Wins Two Michigan Suits

The
right of Mortgage Electronic Registration System, Inc. (MERS) to act as
mortgagee of record for mortgage investors has survived two more court
challenges
, this time in separate decisions in the U.S. District Court for the
Eastern District of Michigan.  In the
first case, Collins v. Macomb County Sheriff, Judge
Patrick J. Duggan said MERS assignment of a mortgage to Wells Fargo,  “is plainly satisfactory to establish a
record chain of title” required by Michigan’s foreclosure statute.  He cited the Michigan Supreme Court’s
decision in Residential Funding Co., LLC v. Saurman
that, as MERS has a right to foreclose by advertisement where it is the
mortgagee as nominee for the lender then MERS was therefore able to assign the
same right to Wells Fargo.

Dugan also cited previous cases in denying
the right of the plaintiffs to even bring the suit on the grounds that “a
litigant who is not a party to an assignment lacks standing to challenge that
assignment.”  The standing of a
plaintiff, usually either the party who was foreclosed or a local government
official claiming a usurpation of authority by MERS, has been an issue in which
MERS has prevailed in several other states.

In the second suit, McLaughlin v. Chase
Home Finance, Judge Lawrence P. Zatkoff rejected the plaintiffs’ claims of
fraud, wrongful foreclosure, and violations of the Fair Debt Collection
Practices Act (FDCPA) by MERS and Chase Home Finance.   Zatkoff also cited the Saurman
decision, writing that “MERS is
statutorily authorized to foreclose by Advertisement…[t]hus, to the extent that
[plaintiffs] rely on the Court of Appeals’ ruling in Saurman, Plaintiffs’ arguments fail as a matter of law.” The
judge also rejected the plaintiffs’ allegations that MERS could not be a
mortgagee, writing that “the Mortgage clearly declares MERS the mortgagee.
Plaintiffs granted the Property and power of sale to MERS and its successors
and assigns. The Mortgage also grants MERS the right to foreclose. MERS in turn
executed an unambiguous document assigning its rights under the Mortgage. 
Thus, a record chain of title clearly exists, providing Chase the right to
foreclose.'”

…(read more)

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