The Department of Housing and Urban Development will re-foreclose on all its REO properties in Michigan where the original foreclosure was conducted in the name of MERS using the state’s nonjudicial process.
In an email to HUD mortgagees that was obtained by National Mortgage News, the agency said most of the major title insurance company underwriters have ceased issuing title insurance for any properties where MERS foreclosed by advertisement.
“As a result, any Michigan REO properties in HUD’s inventory that cannot close due to an inability to obtain title insurance must be re-foreclosed in accordance with the Michigan Court of Appeals opinion,” the email reads.
The policy applies to all Michigan REO properties in HUD’s inventory where MERS executed the initial nonjudicial foreclosure. Currently, HUD has 3,600 REO properties in the state. Making the issue murkier though is uncertainty about how many properties became REOs at the hands of MERS-initiated foreclosures.
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