More MERS Mess Explained
So…the MERS mess continues. Here is some more information so that you may be more informed on the matter impacting our industry. The recent case referenced of late is Residential Funding LLC v Saurman. The court held that MERS is not: the owner of indebtedness, the servicing agent of the mortgage or the owner of an interest in the indebtedness secured by the mortgage.
So what does this mean? MERS can’t foreclose in its own name or as nominee for the lender. If MERS is named as the lender or nominee, it must assign the mortgage to the owner of the debt, or the servicer AND the assignment must be dated prior to teh first publication of the notice of foreclosure, as well as, recorded prior to the date of the sale.
Practically speaking, in this case there was no innocent third party purchaser AFTER the foreclosure in question, therefore the court didn’t address what happen if there had been one. Either way, as a result of this court decision thousands of titles have been unsettled or clouded. Recently, thousands of REO sales have been cancelled and many foreclosures will need to be re-done.
There are several different potential solutions that Title Insurer’s can employ depending upon the details of each situation. Too many criteria need to be reviewed and considered by your title agent, such as; does the new owner have an Owners Policy…was there an assignment from MERS…if so, when was it dated, etc to go into details in a blog format. Suffice it say, that your Title Agent will be going back several years scrutinizing the foreclosure which may result in requirements in order to protect the new insureds going forward. As you encounter this, work with your Title Agent and rely on their knowledge and expertise. At America’s One Title we will explore all solutions available AND work diligently to help our clients resolve any foreclosure concerns as quickly as possible…that’s a promise!
America’s One Title would like to thank Meredith Weingarden, Fidelity Insurance Co for much of the foregoing information.
