Court ruling on MERS and foreclosure

A recent decision in New York from the Appellate Division said that unless the bank foreclosing on your property still holds the original Mortgage and Note, they CANNOT foreclose. Most banks do NOT still own the mortgage and note.

 

 

Appeals Court Clarifies MERS Role in Foreclosures

New York Law Journal, June 13, 2011

The ubiquitous Mortgage Electronic Registration Systems, nominal holder of millions of mortgages, does not have the right to foreclose on a mortgage in default or assign that right to anyone else if it does not hold the underlying promissory note, the Appellate Division, Second Department, ruled Friday. "This Court is mindful of the impact that this decision may have on the mortgage industry in New York, and perhaps the nation," Justice John M. Leventhal wrote for a unanimous panel in Bank of New York v. Silverberg, 17464/08. "Nonetheless, the law must not yield to expediency and the convenience of lending institutions. Proper procedures must be followed to ensure the reliability of the chain of ownership, to secure the dependable transfer of property, and to assure the enforcement of the rules that govern real property." The opinion noted that MERS is involved in about 60 percent of the mortgages originated in the United States.

 

MERS (Mortgage Electronic Recording Systems) most likely has commenced the foreclosure action which they cannot do as per this recent decision.  Most likely, your original lender sold your mortgage and note to another lender weeks, if not days, after you closed.  Do you recall getting a notice from another company that your loan was sold to another company? If so, then you may get help from our programs.