Reply #8: Closings canceled on some bank-owned homes after court rules against MERS [View All]

[Pale Blue Dot]

Local Realtors say title companies are canceling closings on some bank-owned homes after a recent Michigan Court of Appeals decision made it more risky to insure them.

Late last month, the court ruled the Mortgage Electronic Registration System lacks authority to foreclose by advertisement in Michigan. The system is an electronic record-keeper of mortgages.

Foreclosures on two homeowners in Grandville and Jackson are on hold because of the ruling. The ruling could also impact thousands of foreclosures that have already been sold to other buyers, industry experts say.

Raymond DeBates, president of Colonial Title in St. Clair Shores, said that he has not had to cancel any closings yet, but he has put some files aside and is waiting for underwriters to indicate whether the deals can close or not.

http://www.freep.com/article/20110505/BUSINESS04/105050469/Closings-canceled-some-bank-owned-homes-after-court-rules-against-MERS