Wednesday, June 01, 2011

HUD: Underwriters' Refusal To Insure Titles Due To MERS' Michigan Mess Requires Reforeclosure Of Crappy Deeds

National Mortgage News reports:
  • The Department of Housing and Urban Development will re-foreclose on all its REO properties in Michigan where the original foreclosure was conducted in the name of MERS using the state’s nonjudicial process.
  • In late April, the Michigan Court of Appeals ruled that Mortgage Electronic Registration Systems Inc. is ineligible to use the state’s nonjudicial foreclosure process because MERS does not meet the requirements to foreclose by advertisement and should have filed the foreclosures through the state’s judicial process. That ruling vacated the 2009 foreclosures of two borrowers.(1)
  • In an email to HUD mortgagees that was obtained by National Mortgage News, the agency said most of the major title insurance company underwriters have ceased issuing title insurance for any properties where MERS foreclosed by advertisement.
  • As a result, any Michigan REO properties in HUD’s inventory that cannot close due to an inability to obtain title insurance must be re-foreclosed in accordance with the Michigan Court of Appeals opinion,” the email reads.(2)

For more, see MERS Ruling Forces HUD to Reforeclose on Mich. REO.

(1) For more on the crappy title problem in connection with improperly foreclosed homes, see:

(2) For earlier posts on the colossal "home title" mess created by MERS' non-judicial foreclosures in Michigan, see: