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MI MERS Complaint w

MI MERS Complaint w

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Published by DinSFLA

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Published by: DinSFLA on May 11, 2011
Copyright:Attribution Non-commercial


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 Brian T. Dailey (P39945)Justin G. Grove (P71253)Dailey Law Firm, P.C.28000 Woodward, Suite 201Royal Oak, Michigan 48067Phone: (248) 744-5005Facsimile: (248) 744-4440Email: brian@daileylawyers.com justin@daileylawyers.comThomas D. Pigott (Ohio 0062919)Pigott, Ltd.2620 N. Centennial Road, Unit HToledo, Ohio 43617Phone: (419) 776-4567Facsimile: (419) 776-4568Email: tpigott@pigottlaw.comAttorneys for Plaintiffs_______________________________/ 
* * * * * * * *MARLYA DEPAUW and SHARON &TERRANCE LAFRANCE, Individually andas Representatives of a Class of IndividualsSimilarly Situated,Plaintiffs,v.MORTGAGE ELECTRONICREGISTRATION SYSTEMS, INC.c/o The Corporation Trust Company,as Statutory AgentCorporation Trust Center1209 Orange StreetNew Castle, DE 19801,Defendant.Case Number:
 JUDGE:Magistrate Judge:______________________________________________________________________________
Case 2:11-cv-12032-RHC -RSW Document 1 Filed 05/09/11 Page 1 of 16
2Plaintiffs, Marlya Depauw along with Sharon and Terrance Lafrance, on behalf of themselves and others similarly situated herby bring this action against Defendants and for theircomplaint hereby allege as follows:
INTRODUCTIONMERS and the April 21, 2011, Ruling of the State of Michigan Court of Appeals
Mortgage Electronic Registration System, Inc. (“MERS”) is a
wholly-owned subsidiaryof MERSCORP, Inc. with both providing services to financial institutions relative to residentialmortgages including their tracking, registering and at times acting as mortgagee of record in thecapacity of nominee or agent of their lender member clients.
The shareholders and institutional members of MERS include federally regulateddepository, banking and lending institutions, their subsidiaries and affiliates that own and/orservice residential mortgages.
Based upon their members
status, MERS is also subject to the jurisdiction of the Officeof the Comptroller of the Currency, the Board of Governors of the Federal Reserve, the FederalDeposit Insurance Corporation, the Office of Thrift Supervision, and the Federal HousingFinance Agency, and other appropriate Federal banking agencies, as defined by subsection1(b)(1) of the Bank Service Company Act, 12 U.S.C. § 1861(b)(1).4.
MERSCORP, Inc. operates a national registry that tracks ownership and servicing rightsrelative to residential mortgages. There are approximately 5,000 members of MERS, of which3,000 are mortgage servicers.5.
Under information and belief, MERS maintains a database of approximately 31 millionactive residential mortgages.6.
MERS was originally founded by mortgage lenders to establish a central database andholder of promissory notes and mortgages to easily effectuate the aggregation of mortgages forsecuritization and sale as a portfolio of mortgages to individual and institutional investors.7.
An additional reasoning for the founding of MERS was, as the central holder of mortgages for the industry, mortgages could be sold and transferred upon the books and recordsof MERS without any attendant filing of the mortgage transferred in the land records of theindividual counties where the real property was located.
Case 2:11-cv-12032-RHC -RSW Document 1 Filed 05/09/11 Page 2 of 16
MERS, and its founding lenders, had determined that without the need to recordmortgages upon the land records of individual counties each time a transfer or sale occurred,MERS members could save millions of dollars in transfer and recording fees.9.
MERS’ decision to
avoid the filing of mortgages upon transfer in the county where theproperty is located, has resulted in the loss of millions of dollars to county and state governmentsand taxpayers, from the collection of required transfer and recording fees.10.
Among other things, MERS normally acts on behalf of its members serving as mortgageeof record, in a solely nominee capacity, for its members in local land recordings and foreclosurelawsuits.11.
Under information and belief, MERS does not normally own any legal right or interest inthe note associated with the attendant mortgage, and is therefore not a noteholder.12.
MERS has acted in a mortgagee nominee capacity on behalf of its members and withinthe State of Michigan for more than five (5) years.13.
MERS, for itself and at the direction of, and on behalf of, its members, has filedthousands of foreclosures by advertisement in the State of Michigan.14.
During this period, MERS has illegally prosecuted numerous non-judicial foreclosures byadvertisement as permitted under MCL 600.3201,
et seq
., purchased the property at the
subsequent sheriff’s sales and then quit
-claim deeded the properties to its associated note holdingmember.15.
Under information and belief MERS has adopted this illegal practice of circumventingthe required judicial foreclosure process in order to obtain title to mortgaged properties in lesstime, at substantially less cost and to usurp the due process rights of mortgagor homeowners asincluded within the Class.16.
In many of the actions filed by MERS, mortgagor homeowners responded by filingpleadings arguing that MERS did not have the capacity to foreclose by advertisement as they didnot own or have any interest in the underlying indebtedness.17.
In response to these challenges, MERS would normally answer by providing confusingloan documents and claiming an interest in the underlying debt, even though they knew this wasnot true and that they were not complying with the requirements of MCL 600.3201,
et seq.
Even in the face of these challenges, MERS did, and continued for a period of years, toknowingly, fraudulently and illegally foreclose using a State law upon which they had noauthority or right to utilize.
Case 2:11-cv-12032-RHC -RSW Document 1 Filed 05/09/11 Page 3 of 16

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