Mortgage Electronic Registration Systems Inc. “illegally prosecuted” non-judicial foreclosures in Michigan and owes more than $100 million to people who lost their homes, lawyers for three homeowners said in a lawsuit.
The homeowners said Merscorp Inc.’s MERS, which runs an electronic registry of mortgages, used Michigan’s so-called foreclosure by advertisement process illegally and “misappropriated” their homes. Any foreclosures by MERS using this process in Michigan should be voided, they said in their complaint filed in federal court in Detroit.
Michigan is one of 27 states where banks don’t have to get a court’s permission to seize a property, meaning homeowners have to bring their own lawsuit to halt a foreclosure. Michigan law lets mortgage lenders or servicers foreclose after advertising a default in a newspaper for four consecutive weeks.
12. MERS has acted in a mortgagee nominee capacity on behalf of its members and within the State of Michigan for more than five (5) years.
13. MERS, for itself and at the direction of, and on behalf of, its members, has filed thousands of foreclosures by advertisement in the State of Michigan.
14. During this period, MERS has illegally prosecuted numerous non-judicial foreclosures by advertisement as permitted under MCL 600.3201, et seq., purchased the property at the subsequent sheriff’s sales and then quit-claim deeded the properties to its associated note holding member.
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18. Even in the face of these challenges, MERS did, and continued for a period of years, to knowingly, fraudulently and illegally foreclose using a State law upon which they had no authority or right to utilize.
