MERS, PHH Mortgage win at Michigan appeals court
A foreclosure sale tied to a loan securitized and linked to the Mortgage Electronic Registration Systems is valid under Michigan law, a state appellate court ruled this week.
In Mitchell v. PHH Mortgage, the Michigan Court of Appeals agreed with a lower court and accepted a foreclosure procedure involving a MERS assignment.
The court said even though the plaintiffs claim the foreclosure sale is invalid because they did not consent to the ‘MERS securitization process,’ the court rejects this particular argument.
"Plaintiffs expressly agreed in the mortgage that MERS was both the mortgagee and Merrill Lynch’s nominee," the appellate court held in its decision. "A mortgage of record is entitled to foreclose by advertisement" under Michigan code, the judges added.
Furthermore, the judicial panel said Michigan law allows a foreclosure by advertisement when the foreclosing party is not the original lender as long as the chain of title prior to the sale date shows a clear assignment of the mortgage to the foreclosing party.
The court, in this case, said the requirement was satisfied when MERS transferred assignment of the mortgage to PHH months prior to the foreclosure sale.