The Michigan Court of Appeals recently handed down a triumph to the little guy. Basically, the questionable foreclosure authority claimed by the Mortgage Electronic Registration System (MERS) is over with. Fewer people are going to lose their homes.
This is fantastic.
Up until late April there had not been a significant case going against the Mortgage Electronic Registration System (MERS) in the State of Michigan. Not a lot of people challenged them, and even if they did not a lot of courts took the cases seriously.
Who is the MERS? Remember last year when there was that hulabaloo about "robo signers"? Those were the random people pulled off the street paid to sign and authorize mortgage and note transfers in a weird three-shell-game of home mortgage ownership that lead to questionable foreclosure authority.
That was MERS.
For years, MERS swaggered around unquestioned, claiming the right to foreclose on homes and transfer notes...when really, they had nothing. Nothing at all. Little to no authority to do anything.
Michigan Supreme Court recently ruled that MERS cannot foreclose on a house by advertisement. As in, they can no longer just publish your foreclosure in the paper and say "GET OUT." Instead, MERS has to go to court where they would actually have to prove authority to foreclose...which more often than not, they can't do.
MERS held out the promise of easy assignments of mortgages and notes to banks and financial institutions and facilitated an environment of sloppy record keeping as banks bought and sold and transferred and even split up and repackaged partrial ownership and authority over homes.
They invented authority to transfer and assign ownership by pulling poeple off the street, giving them the title of Vice President, and having them sign document after document after document without the presence of a notary...all for the sake of expediency.
And in the end, the chain of ownership got tangled...diffused. Questionable.
MERS claimed authority over mortgages that it never, ever had. Ever. And nobody questioned it until recently.
Now the State of Michigan is requiring MERS to prove in a court of law its authority over a note or mortgage. And they can't. And that's going to put a stop to thousands of foreclosures.
But what about the mortgagee?
Don't they still owe money?
ABSOLUTELY the person in the house owes money to SOMEBDOY.
But to who? In a shocking number of cases, there's really no clear indication who that money is owed to. Many times the company you send a mortgage check to is simply managing the payments...they're getting a small percentage of the money and sending it on to some other company that claims it has the rights to that money. Sometimes, that collection company isn't even passing the money on to another party. It's just pocketing they money because A) they want the money and B) they don't know who to send the money to.
And there's the problem. As it stands now, some random company is coming forward saying it has the authority to kick you out of your house when they in fact do NOT have the authority to do so, and cannot prove their authority to do so.
This is a problem Wall Street created for itself.
And it's high time the courts make them sleep in the bed they've created rather than passing their mess on down to the bottom.
That's not just my opinion...that's the Michigan Appellate Court's opinion, too.