Michigan Appeals Court Finds MERS Role Valid


Three-Judge Panel Rejects Plaintiff Attempt to Cite Michigan Supreme Court in Law Suit

Reston, Virginia – April 15, 2013 – (RealEstateRama) — MERSCORP Holdings, Inc. today announced that a three-judge panel of the Michigan Court of Appeals recently affirmed a lower court decision in favor Mortgage Electronic Registration Systems, Inc. (MERS) and three other defendants, dismissing a five-count wrongful foreclosure complaint.

In Mitchell v. PHH Mortgage Corp., Judges Jane M. Beckering, Kirsten F. Kelley and Joel P. Hoekstra, citing Michigan Compiled Law §600.3201(1), concluded “that the foreclosure in this case satisfied the [four-part] requirements…” of the law.

Their ruling noted that the foreclosing lender, PHH, could indeed foreclose because MERS satisfies the Michigan statutory requirement of having “an interest in the indebtedness secured by the mortgage or the servicing agent of the mortgage,” and, because it was MERS’ assignee, PHH also satisfied the requirements.

“Pursuant to our Supreme Court’s decision in Residential Funding Co. v. Saurman…PHH’s ‘ownership of legal title to a security lien whose existence is wholly contingent on the satisfaction of the indebtedness’ is an interest in the indebtedness secured by the mortgage,” they wrote. “Therefore, PHH was authorized to foreclose.”

The panel rejected other arguments that the foreclosure was invalid when, citing Michigan foreclosure statutes, they held that a record chain of title existed prior to the foreclosure because MERS recorded its assignment to PHH several months before the sheriff’s sale.

“It should be no surprise that the Michigan Court of Appeals affirmed the lower court decision in MERS’ favor,” said MERSCORP Holdings’ Director for Corporate Communications Jason Lobo. “The judges themselves cited established Michigan Supreme Court case law validating MERS’ role and authority.”

For descriptions of cases and other materials pertaining to MERS’ business model and role in U.S. housing, please visit www.mersinc.org.


MERSCORP Holdings, Inc. is a privately held corporation that owns and manages the MERS® System and all other MERS® products. It is a member-based organization made up of thousands of lenders, servicers, sub-servicers, investors and government institutions. Mortgage Electronic Registration Systems, Inc. (MERS) serves as the mortgagee in the land records for loans registered on the MERS® System, and is a nominee (or agent) for the owner of the promissory note. The MERS® System is a national electronic database that tracks changes in mortgage servicing and beneficial ownership interests in residential mortgage loans on behalf of its members.

Jason Lobo
Phone: 703-652-1660

Next articleTreasurer McCord Seeks to Return $232,000 in Unclaimed Property to Libraries, Bookstores and Literacy Organizations During National Library Week