DS News - Digital Archives

» FROM THE BENCH Idaho Supreme Court Affirms MERS' Role as Beneficiary The Idaho Supreme Court dismissed a plaintiff's wrongful foreclosure complaint against Mortgage Electronic Registration Systems, Inc. (MERS), and defendants, affirming a district court ruling. The plaintiff in Edwards v. MERS et. al brought action against the defendants to stop a non-judicial foreclosure and argued MERS, the named beneficiary, could not legally act as the beneficiary. The plaintiff also claimed that listing MERS as the beneficiary does not give MERS the authority to take actions as a beneficiary, including appointing co-defendant Pioneer Lender Trustee Services as successor trustee. The plaintiff further contended MERS must have an interest in the note secured by the deed of trust to act as the beneficiary. The deed of trust showed Lehman Brothers as the lender, while MERS, as nominee for the lender, was named the beneficiary, and Alliance Title was the trustee. However, MERS signed a document stating the "original trustee had ceased acting as trustee" and Pioneer was the trustee in place of Alliance Title, according to the court's opinion. Justice Daniel T. Eismann wrote the opinion on behalf of the five-justice panel and stated, "MERS, as agent for the lender, had the authority to direct that such action be taken." Eismann further explained the trustee, not the beneficiary, is the one who forecloses the deed of trust, and the beneficiary, which was MERS in the case, has the authority to appoint a successor trustee. Furthermore, MERS, acting as nominee of Lehman, could also appoint Pioneer as successor trustee, which gave Pioneer "the authority to institute foreclosure proceedings," the opinion stated. KNOW THIS As of March 31, a total of 2,810 Idaho borrowers received assistance from the National Mortgage Settlement involving five major servicers, according to the settlement monitor. Illinois rank: 6 90+ Day Delinquency Rate Foreclosure Rate March 2013 2.9% Unemployment Rate 5.3% 9.5% year ago 3.0% 7.0% 8.8% year-over-year change -2.2% -23.7% 8.0% Top County Logan CounTy 90+ Day Delinquency Rate Foreclosure Rate March 2013 3.1% 8.0% year ago 3.1% 12.9% year-over-year change 1.8% -37.6% Top Core-Based Statistical area 90+ Day Delinquency Rate LInCoLn, IL Foreclosure Rate March 2013 3.1% 8.0% year ago 3.1% 12.9% year-over-year change 1.8% -37.6% note: The 90+ day delinquecy rate is the percentage of outstanding mortgage loans that are seriously delinquent. The foreclosure rate is the percentage of outstanding mortgage loans currently in foreclosure. State rank is based on the March 2013 foreclosure rate. All figures are rounded to the nearest decimal. The unemployment rate reflects preliminary March 2013 figures released by the Bureau of Labor Statistics. All other data courtesy of LPS Applied Analytics. Illinois Angela Robinson REO Team Leader A Division of Elite Properties Chicago 100 Saunders, Suite 150 Lake Forest, IL 60045 847.714.4457 (c) ar@reoelite.com www.reoelite.com FROM THE BENCH Expediting Foreclosures: From Chicago Pilot to Statewide Implementation On August 19, 2011, the presiding judge of the Chancery Division of Cook County issued General Administrative Order No. 2011-03, establishing an expedited VISIT US ONLINE @ DSNEWS.COM foreclosure court call for residential vacant and abandoned property in Chicago. The General Order went into effect on January 1, 2012, and subsequently the Illinois Senate enacted S.B. 16, which established a statewide expedited foreclosure call beginning June 1, 2013. The General Order and Senate Bill were drafted as a result of the overwhelming mortgage foreclosure crisis and the resulting abandonment of residential property in the state of Illinois. The number of foreclosure filings in Chicago has increased yearly for the past decade. The dramatic increase in residential foreclosure filings resulted in decreased home values year after year, spurring mortgagors to simply walk away from their property. The ensuing high inventory of abandoned property created urban blight in many Illinois communities including the Chicago metropolitan area. In an effort to combat urban blight and the overall destabilization of neighborhoods, community leaders, activists, church groups, and government leaders joined forces to establish the Chicago "Uncontested Vacant Residential Mortgage Foreclosure Call" as effectuated by the General Order. The purpose of the General Order is to expedite the foreclosure process of abandoned property and transfer possession and title to the mortgagee earlier in an effort to avoid urban blight. In order to qualify for the Chicago Expedited Foreclosure Call, the mortgagee must provide a vacancy affidavit at the time the complaint to foreclose is filed. The affidavit must detail the steps taken to determine if the property is vacant along with supporting documentation usually in the form of pictures illustrating abandonment of the property. The benefits of steering a case to the expedited call are numerous. At the outset, the plaintiff can move for summary judgment 30 days from service irrespective of any conflicting local standing orders. In addition, the redemption period can be shortened and possession may be tendered when the final order is issued by the court. The success of the Chicago expedited foreclosure call has encouraged passage of S.B. 16, which adopts a statewide vacant uncontested call. Effective June 1, 2013, S.B. 16 creates an expedited foreclosure call for all Illinois counties and standardizes filing requirements statewide. The statute details the elements of abandonment, such as boarded up windows, lack of utilities, and smashed-in doors, 89

• Cover