MERSCORP has again come out victorious in a legal challenge brought against the company by a disgruntled homeowner.
The company announced earlier this week that the Circuit Court of the Nineteenth Judicial Circuit for Lake County, Illinois rejected a claim from a borrower, who said that their mortgage was void and unenforceable because MERS, the named mortgagee on the mortgage at the time the mortgage was originated, was not licensed under the Illinois Residential Mortgage License Act.
The borrowers, Bogdan and Hanna Schak, executed a mortgage to MERS on Sep. 10, 2007. The mortgage was assigned to CitiMortgage on Sep. 18, 2007. CitiMortgage filed a complaint for foreclosure against the Schaks on June 9, 2010.
A summary judgment was entered against the Schaks on Oct. 2, 2013, their property was subsequently sold and the order approving the sale was entered into the record on June 20, 2014.
The Schaks filed a motion to vacate all of the orders in the case, alleging that neither MERS nor CitiMortgage was licensed under the Illinois Residential Mortgage License Act.
The Circuit Court denied the Schaks’ motion to vacate the summary judgment and order approving the sale of the property in this foreclosure and held that the borrowers’ mortgage was not unenforceable on grounds that MERS was not licensed under the Act.
Citing a Seventh Circuit Court of Appeals ruling involving MERS, the Court ruled in this case that “MERS does not engage in the acts of brokering, funding, originating, servicing, or purchasing residential mortgage loans. Therefore, MERS is not subject to the requirements of the Illinois Residential Mortgage License Act of 1987, and the mortgage cannot be held unenforceable on this basis.”
MERSCORP Holdings Vice President for Corporate Communications Janis Smith said that the company had done nothing outside of the law and celebrated the ruling.
“We are pleased that this Court recognizes that MERS has not done anything contrary to what is required by Illinois law and that mortgages naming MERS as the mortgagee are valid and enforceable,” Smith said.
