The Michigan Supreme Court this afternoon issued a short (two page) Order that reversed the Court of Appeals opinion in Residential Funding Co. v Saurman, which I discussed previously. The Saurman opinion in the Court of Appeals had ruled that Mortgage Electronic Registration Systems, Inc. (“MERS”) could not foreclose by advertisement in the State of Michigan unless it owned the note.
The Supreme Court decided the case on Application for Leave to Appeal. Rather than grant leave to appeal, the Court instead ordered that oral argument be held upon the application for leave to appeal, and reversed the Court of Appeals.
The Supreme Court essentially adopted the dissenting opinion from the Court of Appeals, ruling that although MERS did not own the mortgage note itself, MERS was “recordholder of the mortgage,” which was a sufficient “interest in the indebtedness” to satisfy the statutory requirement that the foreclosing entity be an “owner of an interest in the indebtedness.” Essentially, the Supreme Court determined that the Court of Appeals improperly interpreted the meaning of the language of the foreclosure by advertisement statute.
This Supreme Court Order appears to definitively resolve the issue of whether MERS can foreclose a mortgage by advertisement in MERS’ name, rather than the name of the owner of the note, in the State of Michigan.
