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BAKRI v MERS, BONY, TROTT & TROTT PC | Michigan Appeals Court REVERSED “MERS did not have the authority to foreclose by advertisement, No interest in Note”

BAKRI v MERS, BONY, TROTT & TROTT PC | Michigan Appeals Court REVERSED “MERS did not have the authority to foreclose by advertisement, No interest in Note”


S T A T E  O F  M I C H I G A N
C O U R T  O F  A P P E A L S

ALLEN BAKRI,
Plaintiff-Appellant,

v.

MORTGAGE ELECTRONIC REGISTRATION
SYSTEM, MERSCORP INC, BANK OF NEW
YORK MELLON, f/k/a BANK OF NEW YORK,
and TROTT & TROTT PC
,
Defendants-Appellees.

EXCERPT:

Although we find that the trial court properly concluded that defendant MERS had the
right to assign the mortgage to defendant Bank of New York Mellon and that defendant Bank of
New York Mellon had the power to foreclose on and sell the property, our inquiry does not end
there. There is another layer to the analysis, which involves an issue not raised by the parties,
but decided in our recent decision in Residential Funding Co, LLC v Saurman, ___ Mich App
___; ___ NW2d ___ (Docket Nos. 290248 & 291443; April 21, 2011) (Shapiro, J.). In Saurman,
the issue was whether a mortgagee who was not the note holder could foreclose by advertisement
under MCL 600.3204(1)(d). Saurman, slip op pp 7-8. We held that under MCL 600.3204(1)(d),
the Legislature has limited foreclosure by advertisement to those parties with ownership of an
interest in the note and that because the mortgagee was not “the owner . . . of an interest in the
indebtedness secured by the mortgage[,]” MCL 600.3204(1)(d), it lacked the authority to
foreclose by advertisement:

Applying these considerations to the present case, it becomes obvious that
MERS did not have the authority to foreclose by advertisement on defendants’
properties. Pursuant to the mortgages, defendants were the mortgagors and
MERS was the mortgagee. However, it was the plaintiff lenders that lent
defendants money pursuant to the terms of the notes. MERS, as mortgagee, only
held an interest in the property as security for the note, not an interest in the note
itself. MERS could not attempt to enforce the notes nor could it obtain any
payment on the loans on its own behalf or on behalf of the lender. Moreover, the
mortgage specifically clarified that, although MERS was the mortgagee, MERS
held “only legal title to the interest granted” by defendants in the mortgage.
Consequently, the interest in the mortgage represented, at most, an interest in
defendants’ properties. MERS was not referred to in any way in the notes and
only Homecomings held the notes. The record evidence establishes that MERS
owned neither the notes, nor an interest, legal share, or right in the notes. The
only interest MERS possessed was in the properties through the mortgages.
Given that the notes and mortgages are separate documents, evidencing separate
obligations and interests, MERS’ interest in the mortgage did not give it an
interest in the debt. [Saurman, slip op pp 10-11 (emphasis in original; footnote
omitted).]

[ipaper docId=62108439 access_key=key-1qner0p8mcrew6up4vh1 height=600 width=600 /]

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