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FROM THE BENCH Appeals Court Sides with MERS in Mortgage Assignment Case Illinois Idaho rank: 27 90+ Day Delinquency Rate Foreclosure Rate January 2013 1.91% Unemployment Rate 2.48% 6.3% year ago 2.19% 2.75% 7.6% year-over-year change A three-judge panel of the U.S. Court of Appeals for the Ninth Circuit has affirmed, without hearing, an order dismissing claims against Mortgage Electronic Registration Systems, Inc. (MERS), according to a February release from MERSCORP Holdings. The appellate ruling affirmed a decision issued by District Judge David Alan Ezra of the District Court for Hawaii. The complaint against MERS was dismissed with prejudice. According to the release, the plaintiff's second amended complaint against MERS contained four allegations related to its assignment of a mortgage to a foreclosing lender. The ruling found that MERS, as nominee for the lender and the lender's successors and assigns, had authority to assign the mortgage to a third party. "[T]he court has grave doubts about the validity of the factual predicate underlying most, if not all, of plaintiffs' claims," Judge Ezra wrote. He also held that "the Ninth Circuit concluded that MERS was a legitimate organization and that the mortgage which plaintiffs signed put them on notice of the role MERS was to play in their home loans." "Judge Ezra could have simply dismissed these allegations when noting that the plaintiffs were not a party to the assignment and, therefore, could not challenge its validity, but he further analyzed the merits—or lack thereof—of the complaint," said Jason Lobo, MERSCORP Holdings' director for corporate communications. "We are pleased that Judge Ezra found no merit to these charges and that the appellate panel agreed with his methodical rejection of these frequently used and always failing legal arguments." -13.1% -9.7% -17.1% Top County LInCoLn CounTy 90+ Day Delinquency Rate January 2013 5.84% Foreclosure Rate 100 Saunders, Suite 150 Lake Forest, IL 60045 847.714.4457 (c) ar@reoelite.com www.reoelite.com 4.82% 5.20% 6.36% FROM THE BENCH year-over-year change 12.3% -24.3% Top Core-Based Statistical Area 90+ Day Delinquency Rate TwIn FALLS, ID Foreclosure Rate January 2013 2.03% 3.63% year ago 2.36% 3.30% year-over-year change -13.7% 10.2% note: The 90+ Day delinquecy rate is the percentage of outstanding mortgage loans that are 90plus days delinquent. The foreclosure rate is the percentage of outstanding mortgage loans currently in foreclosure. State rank is based on the January 2013 foreclosure rate. All figures are rounded to the nearest decimal. The unemployment rate reflects preliminary January 2013 figures released by the Bureau of Labor Statistics. All other data courtesy of Lender Processing Services. Illinois rank: 6 90+ Day Delinquency Rate Foreclosure Rate January 2013 3.05% Unemployment Rate 5.50% 9.0% year ago 3.24% 7.10% 9.1% year-over-year change -5.9% -22.5% -1.1% Top County Logan CounTy 90+ Day Delinquency Rate Foreclosure Rate January 2013 3.36% 9.10% year ago 4.27% 12.94% year-over-year change -21.3% -29.6% Top Core-Based Statistical area 90 REO Team Leader A Division of Elite Properties Chicago year ago KNOW THIS The median list price in Honolulu, Hawaii, was $468,000 at the end of February, according to Realtor.com. Angela Robinson 90+ Day Delinquency Rate LInCoLn, IL Foreclosure Rate January 2013 3.36% 9.10% year ago 4.27% 12.94% year-over-year change -21.3% note: -29.6% The 90+ Day delinquecy rate is the percentage of outstanding mortgage loans that are 90plus days delinquent. The foreclosure rate is the percentage of outstanding mortgage loans currently in foreclosure. State rank is based on the January 2013 foreclosure rate. All figures are rounded to the nearest decimal. The unemployment rate reflects preliminary January 2013 figures released by the Bureau of Labor Statistics. All other data courtesy of Lender Processing Services. Illinois Supreme Court Enacts New Foreclosure Rules On February 22, the Illinois Supreme Court issued new rules intended to establish a uniform protocol to mitigate abuses and uncertainty in the mortgage foreclosure process. The rules take effect May 1 and address three specific areas: court-annexed foreclosure mediation, foreclosure pleading and prove-up requirements, and loss mitigation. In announcing the rules, the Supreme Court expressed concern about "wellpublicized deceptive practices at the national and local level and the significant impact the continuing flow of residential mortgage foreclosures is having on Illinois citizens and communities." Foreclosure Mediation. Rule 99.1 requires all circuits that have enacted a foreclosure mediation program to incorporate certain elements into the program, including resources to provide a homeowner whose primary residence is being foreclosed with HUD-certified housing counseling, legal representation, and foreign language translation if needed. The rule permits circuits to pass any associated costs on to participants. Circuits are also required to establish a sustainability plan and provide training for judges, court personnel, and foreclosure mediation volunteers. Of Illinois' 24 judicial circuits, six have instituted foreclosure mediation programs and at least two more are in the final stages of implementing programs. Circuits are free to develop their own programs, provided they are in compliance with the new rule. Currently there are both mandatory and opt-in

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