MICHIGAN: FORECLOSURE REVERSED — MERS NOT THE OWNER OF ANYTHING

SAURMAN 53640926-Michigan-Court-of-Appeals-MERS-May-NOT-Foreclose-by-Advertisement

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EDITOR’S COMMENT: This case is very significant despite the apparent narrow ruling on advertisement. The reason it is important is that the reason the court decided to reverse the foreclosure, reverse the sale and stop the eviction action, was that MERS was and is by definition a non-existent entity in the chain of title — something we have been saying here for years.

The High Court realized without much difficulty that you might just as well put the name Donald Duck in the Deed of Trust or mortgage as beneficiary or mortgagee, because the express wording of the document makes it clear that it is a shield to hide multiple other transactions, thus depriving the world from knowing the identity of the creditor. This means that nobody knows who can sign a satisfaction of mortgage, except by accepting the word of some third party who had nothing to do with the original transaction. The High Court in Michigan keeps it simple and states that using such subterfuge does not qualify you to run around the requirements of law.

Now the question is what to do about all those foreclosures that already did happen. The Court has an answer for that too in this well-written opinion. The subsequent sale to a third party after the auction is void. That was easy for the Court, because the auction sale was itself improper and void. The issuance of a deed upon a false “credit bid’ is a wild deed to be ignored in the title chain.

STATE OF MICHIGAN
COURT OF APPEALS

RESIDENTIAL FUNDING CO, LLC, f/k/a
RESIDENTIAL FUNDING CORPORATION,

Plaintiff-Appellee,

v

GERALD SAURMAN,

Defendant-Appellant.

BANK OF NEW YORK TRUST COMPANY,

Plaintiff-Appellee,

v

COREY MESSNER,

Defendant-Appellant.

Before:  WILDER, P.J., and SERVITTO and SHAPIRO, JJ.

SHAPIRO, J.

These consolidated cases each involve a foreclosure instituted by Mortgage Electronic Registration System (MERS), the mortgagee in  both cases.  The sole question presented is whether MERS is an entity that qualifies under MCL 600.3204(1)(d)  to foreclose by advertisement on the subject properties, or if it must instead seek to foreclose by judicial process.  We hold that MERS does not meet the requirements of MCL 600.3204(1)(d) and, therefore, may not foreclose by advertisement.

CONCLUSION
Defendants were entitled to judgment as  a matter of law because, pursuant to MCL 600.3204(1)(d), MERS did not own the indebtedness, own an interest in the indebtedness secured by the mortgage, or service the mortgage.  MERS’ inability to comply with the statutory requirements rendered the foreclosure proceedings in both cases void ab initio.  Thus, the circuit courts improperly affirmed the district courts’ decisions to proceed with eviction based upon the foreclosures of defendants’ properties.

In both Docket No. 290248 and 291443, we reverse the circuit court’s affirmance of the district court’s orders, vacate the foreclosure  proceedings, and remand for further proceedings consistent with this opinion.  We do not retain jurisdiction. Defendants, as the prevailing parties, may tax costs.  MCR 7.219(A).

11 Responses

  1. So true about time for letting people get away with it (harming others). There should never be a limit on the time it can be brought to trial. Our country is so screwed up to say it’s ok for behavior, just as long as you don’t get caught….. for long. All topics of law are this way as it is the way of the law makers

  2. Sadly, there are more laws about limiting the time period to bring a complaint against someone who has harmed you then there are laws to protect you.

  3. Linda Green documents to be entered into evidence have to be presented in accordance with law and motions under law.

    The COURT (Judge) as an independent body does not say look there is Linda Green’s name so this ‘complaint’ does not count.

    How to get the evidence certified and submitted. And by the way, the court will still need more evidence for you benefitted $1 and the COURT PRESUMES the documents filed by the Plaintiff are true.

    So what are you going to do about that?

    GET EVIDENCE that the party is not the LENDER and they are not the party owed the debt and the Chain of Title evidence revealing all of the defects. Will that lead to a lender who may be owed the debt?

    Even so,

    How will the conveyance of the mortgage back out of the mortgage pool be legal ?

    Will they bring into Court to be incorporated as evidence the actual PSA and FWP and NOTE, all of the Reconstituion or Reconstituted documents and agreements that the SERVICER can try to buy back the bad debt?

    Will the documents be certified by the Loan Trust?

  4. Here is example of a Real Mortgage Pass Through Security in 1997 before MERS.

    MASTER SERVICER

    OCWEN BANK FSB
    Wholly Owned subsidiary Ocwen Financial Corporation is market leader in the Non-Performing Mortgage Loan Acquistion Business.

    See the langugage – real laws acknowledged and followed?

    Cut/Pasted

    1/28/98 Salomon Bros Mort Sec VII…Hud-1 15-15D
    Registrant Salomon Bros Mort Sec VII Inc Mor Pa Thr Cert Se 1997 Hud-1
    Jay B. Goldman Officer of Ocwen Federal Bank (FSB) (561) 681-8279 or fax (561) 68 1 -8186
    Bank had in effect a fidelity bond and an errors and omissions policy in the
    combined amount of $10,000,000.00
    LASALLE NATIONAL BANK CAPACITY AS TRUSTEE 135 South LaSalle Street, Suite 1740 Chicago, Illinois 60674-4107

    The Offered Certificates will be transferable and exchangeable at
    the corporate trust offices of the Trustee, located in Chicago, Illinois.

    Exhibit 99.2
    Price WatterhouseLLP
    One East Broward Blvd, Suite 1700, Fort Lauderdale FL 33301
    954-463-6280

    Possibly Inactive per 1/28/98 Form 15
    Office Address Map…
    Mail Address Map…

    Seven World Trade Cntr
    29h Floor
    New York, New York 10048
    U.S.A. Seven World Trade Center
    29th Floor
    New York, New York 10048
    U.S.A.

    Phone Number Incorporated In IRS Number Fiscal-Year End SEC CIK #
    1-212-783-7000
    Delaware, U.S.A.
    13-3439681 12/31
    1038585

    SIC Code Industry Source As Of
    6189 Asset-Backed Securities (ABSs)
    SEC 4/14/98
    Master Servicer, Ocwen Bank FSB wholly owned subsidiary Ocwen Financial Corporation, MAJOR BUSINESS RESOLUTION OF NONPERFORMING LOAN PORTFOLIOS ACQUIRED FROM THE ‘RESOLUTION TRUST CORPORATION, FROM PRIVATE INVESTORS, AND MOST RECENTLY, FROM HUD, THROUGH HUD’S AUCTION OF DEFAULTED FHA LOANS.

    “MASTER SERVICER’ OCWEN BANK FSB, WHOLLY OWNED SUBSIDIARY OCWEN FINANCIAL CORPORATION,, IS MARKET LEADER IN THE NONPERFORMING MORTGAGE LOAN ACQUISTION BUSINESS (1996) HAVING ACQUIRED IN EXCESS OF $3.7 BILLION OF SUCH MORTGAGE LOANS OVER PAST 5 YEARS ((1992)) RESIDENTIAL AND COMMERCIAL.

    PROSPECTUS: 4/29/1997 http://www.secinfo.com/dqTm6.85d.htm?Find=UNDERWRITER#47thPage
    UNDERWRITER: SOLOMON BROTHERS, INC
    “Offered Certificates” will be purchased by the Underwriter from the Depositor.
    “CERTIFICATES” SOLOMON BROTHERS, INC WILL PURCHASE FROM ‘SALOMON BROTHERS MORTGAGE SECURITIES VII, INC. DEPOSSITOR
    Underwriter SOLAMAN BROTHERS INC. will offer to public in negotiated transactions or otherwise varying prices…Offered Certificates subject To receipt and acceptance by the Underwriter SOLOMAN BROTHERS INC.
    MASTER SERVICER – OCWEN FEDERAL BANK FSB Fort Lee NJ headquartered, a federally chartered savings bank. And is a wholly-owned subsidiary of Ocwen Financial Corporation, a public financial services holding company. (Office of Thrift Supervision)
    DEPOSITOR: SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.
    ISSUANCE OF CERTIFICATES: DEPOSITOR, SALOMON BROTHERS MORTGAGE SECURITIES VV INC WILL CAUSE THE ‘MORTGAGE LOANS’ TO BE ASSIGNED TO THE TRUSTEE. WITH RESPECT TO SUCH ‘MORTGAGE LOANS’ AFTER THE CUT-OFF DATE.
    TRUSTEEE LASALLE BANK NA, WILL CONCURRENTLY WITH SUCH ASSIGNMENT, DELIVER CERTIFICATES TO DEPOSITOR SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.
    IN EXCHANGE FOR THE TRUST FUND

    TRUST FUND (PROCEEDS sole source of payments) on the offered CERTIFICATES
    CERTIFICATES NOT AN OBLIGATION OF OR INTEREST OF …I
    SELLER ‘MORTGAGE LOAN’
    CERTIFICATES ‘NOT INSURED’
    MORTGAGE LOANS (UNDERLYING) ARE NOT INSURED OR GUARANTEED BY ANY GOVERMENTAL AGENCY OR INSTRUMENTALITY.
    DEPOSITER SALOMON BROTHERS MORTGAGE SECURITIES VV, INC. WILL (EACH MORTGAG ELOAN, DELIVE ROR CAUSE TO BE DELIVERED TO THE TRUSTEE (LASALLE BANK NA)
    (i) The Mortgage Note endorsed, without recourse, to the order of the Trustee (or the original assignment and lost note affidavit in those cases where HUD did not deliver an original Mortgage Note to the Mortgage Loan Seller),
    (ii) The Mortgage with evidence of recording indicated thereon (or a copy of such Mortgage certified by the related recording office
    (iii) An Assignment of the Mortgage to the TRUSTEE in recordable form.
    Master Servicer: OCWEN FEDERAL BANK FSB WILL PROMPTLY CAUSE THE ASSIGNMENT of each related Mortgage Loan to be recorded in the appropriate public offic3e for real property records.

    Trustee will hold such documents in trust for the benefit of the Certificateholders.
    Trustee will review the Mortgage Note described in the clause
    (i) Above prior to the Closing Date.
    (ii) Mortgage Loan Seller must cure the omission or defect. The Mortgage Loan Seller will be obligated to repurchase the related Mortgage Loan from the Trust Fund, at the Purchase price or substitute for such Mortgage Loan
    (iii) There can be no assurance that the Mortgage Loan Seller will fulfill this repurchase or substitution obligation constitutes the sole remedy available to the Certificateholders or the TRUSTEE LaSalle Bank NA for omission of, or a material defect in, a Mortgage Note.
    (iv)

    File Date: March 25, 1998 (10K for 1997)
    FORM 10-K

    Annual Report Pursuant to Section 13
    or 15(d) of the Securities Exchange Act of 1934
    for the fiscal year ended December 31, 1997

    Commission File Number: 333-22559

    Salomon Brothers Mortgage Securities VII, Inc.
    (Exact Name of registrant as specified in its charter)

    Delaware jURISDICTION 13-3439681 (I.R.S. Employer
    Seven World Trade Center, New York, New York 10048
    (Address of Principal Executive Office)

    212-783-5659
    (Registrant’s telephone number, including area code)
    CLASS ‘A’ PROTECTION “CREDIT ENHANCEMENTS”
    The rights of the holders of the Class B Certificates and the Residual Certificates to receive distributions with respect to the Mortgage Loans will be subordinate to the rights of the holders of the Senior Certificates, and the rights of the holders of the Residual Certificates to receive distributions with respect to the Mortgage Loans will be subordinate to the rights of the holders of the Senior Certificates and the Class B Certificates, in each case to the extent described herein. Further, the Class B Certificates of any class having a higher numerical class designation are subordinated, to the extent described herein, to the Class B Certificates of each class having a lower numerical class designation.



    As: Registrant Goldman Jay
    List All Filings as Signatory “Jay Goldman” = 12 Registrants
    “Jay Goldman” has been a Signatory for/with the following 12 Registrants:
    • City Holding Capital Trust
    • City Holding Capital Trust II
    • City Holding Co
    • Easylink Services Corp [ formerly Mail Com Inc ]
    • First Look Media Inc [ formerly Overseas Filmgroup Inc ]
    • FNX Mining Co Inc
    • Goldman Jay
    • National Properties Investment Trust [ formerly Roberts Richard Real Estate Growth Trust I ]
    • Next Wave Telecom Inc
    • NWT Uranium Corp [ formerly Northwestern Mineral Ventures Inc ]
    • Philips International Realty Corp
    • Salomon Bros Mort Sec VII Inc Mor Pa Thr Cert Se 1997 Hud-1

    REGISTRATION OF THE BOOK-ENTRY CERTIFICATES

    DTC is a limited-purpose trust company organized under the laws of the
    State of New York, a member of the Federal Reserve System, a “clearing
    corporation” within the meaning of the New York Uniform Commercial Code, and a
    “clearing agency” registered pursuant to the provisions of Section 17A of the
    Securities Exchange Act of 1934, as amended. DTC was created to hold securities
    for its participating organizations (“Participants”) and to facilitate the
    clearance and settlement of securities transactions between Participants through
    electronic book entries, thereby eliminating the need for physical movement of
    certificates. Participants include securities brokers and dealers (including the
    Underwriter), banks, trust companies and clearing corporations. Indirect access
    to the DTC system is also available to others such as banks, brokers, dealers,
    and trust companies that clear through or maintain a custodial relationship with
    a Participant, either directly or indirectly (“Indirect Participants”).

    Certificate Owners that are not Participants or Indirect Participants but
    desire to purchase, sell or otherwise transfer ownership of, or other interests
    in, the Book-Entry Certificates may do so only through Participants and Indirect
    Participants. In addition, Certificate Owners will receive all distributions of
    principal of and interest on the Book-Entry Certificates from the Trustee
    through DTC and DTC Participants. The Trustee will forward payments to DTC in
    same day funds and DTC will forward such payments to Participants in next day
    funds settled through the New York Clearing House. Each Participant will be
    responsible for disbursing such payments to Indirect Participants or to
    Certificate Owners. Unless and until Definitive Certificates are issued, it is
    anticipated that the only Certificateholder of the Book-Entry Certificates will
    be CEDE, as nominee of DTC. Certificate Owners will not be recognized by the
    Trustee as Certificateholders, as such term is used in the Agreements and
    Certificate Owners will be permitted to exercise the rights of
    Certificateholders only indirectly through DTC and its Participants.

    Under the rules, regulations and procedures creating and affecting DTC and
    its operations (the “Rules”), DTC is required to make book-entry transfers of
    Book-Entry Certificates among Participants and to receive and transmit
    distributions of principal of, and interest on, the Book-Entry Certificates.
    Participants and Indirect Participants with which Certificate Owners have
    accounts with respect to the Book-Entry Certificates similarly are required to
    make book-entry transfers and receive and transmit such payments on behalf of
    their respective Certificate Owners. Accordingly, although Certificate Owners
    will not possess Definitive Certificates, the Rules provide a mechanism by which
    Certificate Owners through their Participants and Indirect Participants will receive
    payments and will be able to transfer their interest.

    Because DTC can only act on behalf of Participants, who in turn act on
    behalf of Indirect Participants and on behalf of certain banks, the ability of a
    Certificate Owner to pledge Book-Entry Certificates to persons or entities that
    do not participate in the DTC system, or to otherwise act with respect to such
    Certificates, may be limited due to the absence of physical certificates for the
    BookEntry Certificates. In addition, under a book-entry format, Certificate
    Owners may experience delays in their receipt of payments since distribution
    will be made by the Trustee to CEDE, as nominee for DTC.

    Under the Rules, DTC will take action permitted to be taken by a
    Certificateholder under the Agreement only at the direction of one or more
    Participants to whose DTC account the Book-Entry Certificates are credited.
    Additionally, under the Rules, DTC will take such actions with respect to
    specified Voting Rights only at the direction of and on behalf of Participants
    whose holdings of BookEntry Certificates evidenced such specified Voting Rights.
    DTC may take conflicting actions with respect to Voting Rights, to the extent
    that Participants whose holdings of Book-Entry Certificates evidenced such
    Voting Rights, authorize divergent action.

    The Depositor, the Master Servicer, the Trustee and the Fiscal Agent will
    have no liability for any aspect of the records relating to or payments made on
    account of beneficial ownership interests in the Book-Entry Certificates held by
    CEDE, as nominee for DTC, or for maintaining, supervising or reviewing any
    records relating to such beneficial ownership interests.

    DEFINITIVE CERTIFICATES

    Definitive Certificates will be issued to Certificate Owners or their
    nominees, respectively, rather than to DTC or its nominee, only if (i) the
    Depositor advises the Trustee in writing that DTC is no longer willing or able
    to discharge properly its responsibilities as Clearing Agency with respect to
    the Book-Entry Certificates and the Depositor is unable to locate a qualified
    successor, (ii) the Depositor, at its option, elects to terminate the book-entry
    system through DTC, or (iii) after the occurrence of a Master Servicer event of
    default, Certificate Owners representing in the aggregate not less than 51% of
    the Voting Rights of the Book-Entry Certificates advise the Trustee and DTC
    through Participants, in writing, that the continuation of a book-entry system
    through DTC (or a successor thereto) is no longer in the Certificate Owners’
    best interest.

    Upon the occurrence of any event described in the immediately preceding
    paragraph, the Trustee is required to notify all Certificate Owners through
    Participants of the availability of Definitive Certificates. Upon surrender by
    DTC of the Definitive Certificates representing the Book-Entry Certificates and
    receipt of instructions for re-registration, the Trustee will reissue the
    Book-Entry Certificates as Definitive Certificates issued in the respective
    principal amounts owned by individual Certificate Owners, and thereafter the
    Trustee will recognize the holders of such Definitive Certificates as
    Certificateholders under the Agreement. Such Definitive Certificates will be
    issued in minimum denominations of $10,000, except that any beneficial ownership
    represented by a Book-Entry Certificate in an amount less than $10,000
    immediately prior to the issuance of a Definitive Certificate shall be issued in
    a minimum denomination equal to the amount of such beneficial ownership.

    DISTRIBUTIONS ON THE CERTIFICATES

    Distributions on the Certificates will be made, to the extent of available
    funds, on the 25th day of each month (or, if any such 25th day is not a business
    day, then on the next succeeding business day), beginning in May 1997 (each, a
    “Distribution Date”). The total of all payments and other collections (or
    advances in lieu thereof) on or in respect of the Mortgage Loans that are
    available for distribution to holders of the Certificates (“Certificateholders”)
    on any Distribution Date is the “Available Distribution Amount” for such date.

    Login http://www.SECINFO.COM.
    Once logged in, cut pages URL

    http://www.secinfo.com/dqTm6.85d.htm?Find=UNDERWRITER#47thPage

  5. no kidding, right. How many times did they say they are not owners, yet how many claims to foreclosure are there. Regarding the Linda Green “possible” fraud. I showed a person who knows nothing about the foreclosure and they said how in the hello can that not be prosecuted?

  6. Inside the Prospectus you’ll find the following statements written in the agreement:. You’ll be surprised to see that during action to foreclosue they are aware of statutes and in a contested case where you stick to ‘Chain of Title’ the judge may rule in your favor for unconscionable behavior…

    From 2005-10 Prospectus Structured Asset Securities Corp

    “An action to foreclose a mortgage is an action to recover the mortgage debt by enforcing the mortgagee’s rights under the mortgage. It is regulated by statutes and rules and subject throughout to the court’s equitable powers.
    Generally, a mortgagor is bound by the terms of the mortgage note and the mortgage as made and cannot be relieved from his default if the mortgagee has exercised his rights in a commercially reasonable manner. However, since a
    foreclosure action historically was equitable in nature, the court may exercise
    equitable powers to relieve a mortgagor of a default and

    108

    424B5 662nd Page of 714 TOC 1st Previous Next Bottom Just 662nd

    deny the mortgagee foreclosure on proof that either the mortgagor’s default was
    neither willful nor in bad faith or the mortgagee’s action established a
    waiver, fraud, bad faith, or oppressive or unconscionable conduct sufficient to
    warrant a court of equity to refuse affirmative relief to the mortgagee. Under
    certain circumstances a court of equity may relieve the mortgagor from an
    entirely technical default where the default was not willful.

  7. Good job Michigan, let’s get Mass going!

  8. I can’t wait for the tsunami of lawsuits to get homes back because of illegal foreclosure. This stuff could go on for years and years. If you are an attorney, you need to bone up on foreclosure defense and illegal foreclosure. Whatta bonanza! Burmese8@yahoo.com

  9. umm, Debi – this was a Michigan case, not Florida….

  10. Why do we allways get people in florida like this? Bait and switch or rotten to the core? U decide. Our AG needs to be impeached over this. Who wants someone who obviously sides only with and for the bank. Can’t wait to see what her portfolio holds. Let me get this right so I completely understand– the AG won’t be fining the felons? They are set loose on the public again without any payment for their felonies? Is this for real? Are we rally living in the US or is it China in disquise? What a wicked, crooked, corrupt disgusting world. Pam should be ashamed of herself…or was the pay off way to great to care? Would someone please release her portfolio please? That way we can confirm her interests. So sickened by this. Debi

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