On Thursday, the Michigan Supreme Court will hear arguments in a case that could affect a large number of home foreclosures.
The Court of Appeals ruled that mortgage lenders should not have used a national industry agency to file the foreclosures. The lower court found the Mortgage Electronic Registration System, or MERS, had no standing to file the foreclosure paperwork.
“Anytime you’re going to take the fast track on foreclosing and take another person’s property…you need to be able to do it correctly…and right ….and legitimately," sais Lorray Brown, an attorney with the Michigan Poverty Law Program.
James Breay represents the Michigan Bankers Association and Mortgage Lenders Association. He said if the lower court ruling is upheld, it could mean that tens of thousands of home foreclosures would be avoided.
“It could be really quite chaotic. We’re hopeful the (Michigan) Supreme Court will recognize that as well as proprietary of that and reverse the Court of Appeals," said Breay.
Lorray Brown with the Michigan Poverty Law Program said the mortgage industry is overstating the potential effect if the Michigan Supreme Court allows the lower court ruling to stand.