Ingham County helps fradulent foreclosure victims

By Roberta M. Gubbins Legal News Legal Services of South Central Michigan (LDDCM) has a received a one year $60,000 contract from the Ingham County Board of Commissioners to provide representation to homeowners who are about to lose their homes due to fraudulent foreclosures. "We are in the process of hiring a contract attorney who will be working solely with Ingham County foreclosures," said Lori Pourzan, managing attorney for LSSCM. "Our goal is to have that person in place by July 1st." Curtis Hertel, Ingham County Register of Deeds, began to see a pattern of what appeared to be fraudulent foreclosures last spring. The first was by a company named Docx that hired people to sign names on mortgage assignments transferring the note underlying the mortgage from one institution to another. All were signed by a "Linda Green" as an employee of the transferring bank, which she was not--she was an employee of Docx. Hertel, who saw the report on "60 minutes" searched Ingham County records and found at least 60 mortgage assignments from Docx. The second series of documents came from Mortgage Electronic Registration Systems, Inc. (MERS) In April the Michigan Court of Appeals ruled that MERS did not have the authority to start a foreclosure by advertisement if it didn't actually own an interest in the debt on the homes. "What MERS did was act as an owner of record to transfer property from Bank A to B to C to D to E without registering the transfers with our office," said Hertel. "Michigan law doesn't require registration." When the property was foreclosed, they would transfer the property from Bank A to E without the intermediate transfers. The Court of Appeals held that failure to register each transfer was improper. Deciding something needed to be done, Hertel is sending letters to owners of property in which MERS was the foreclosing party as well as those situations in which Docx filed a mortgage assignment. "If the owners have been evicted from their property, we will suggest they contact Daily and Associates, PC. a law firm planning a class action law suit against MERS. For those who are still in their homes, we will advise them to contact Legal Aide," he said. "The letters will direct the recipient to our hotline and a website where they can enter their information and receive an intake number," Pourzan said indicating that could streamline the process. What about those purchasers who bought a foreclosed home only to discover that the original foreclosure was invalid--do they have good title to their homes? Will title insurance provide protection? Will the banks notify the current owner if the foreclosure is filed for a second time? "There are layers of issues that will have to be resolved," said Candace Wilson, local attorney who specializes in real estate. "We just don't have specific answers to those questions at this time." It appears that the problems created by MERS, Docx and others as yet undiscovered will not be easily resolved and could continue to haunt Michigan homeowners for many years to come. Published: Thu, Aug 4, 2011

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