- August 25, 2014
- All Maine Issuing Offices
- UNDERWRITING - Bank of America, N.A. v. Scott A. Greanleaf, 2014 ME 89
In its decision dated July 3, 2014, in the above-referenced matter, the Maine Supreme Court concluded that Bank of America, as foreclosing mortgagee, was not the owner of the mortgage and, therefore, lacked standing to foreclose. The Court based its conclusion on the finding that MERS had only the right to record the mortgage as nominee for the original lender. Thus, the assignment from MERS to the foreclosing lender was only an assignment of the right to record the mortgage as nominee, not an assignment of ownership of the mortgage.
The Court’s decision has resulted in considerable uncertainty in those titles where MERS has given an assignment or discharge of a mortgage. Please proceed as follows in those situations where MERS appears in the chain of title:
- In a post-foreclosure sale of property where MERS appears as an assignor in the chain of ownership of the foreclosed mortgage and where judgment was entered prior to July 3, 2014, you may insure without exception and subject to customary underwriting considerations. This includes establishing that no appeal of the foreclosure judgment was taken.
- In a post-foreclosure sale of property where MERS appears as an assignor in the chain of ownership of the foreclosed mortgage and where judgment was entered on or after July 3, 2014, you must satisfy yourself that the foreclosing mortgagee owned the mortgage at the time of the foreclosure. If MERS was the nominee for the original lender and the original lender foreclosed, then there must be an assignment from MERS to the original lender. If the foreclosing mortgagee was not the original lender, then there must be an assignment recorded prior to the commencement of foreclosure from both MERS and the original lender to the foreclosing mortgagee or to the foreclosing mortgagee’s predecessor in title.
If the foreclosing mortgagee did not have proper ownership of the mortgage coming through MERS, you may insure with the following exception:
Claims of title by the __________ (mortgagor) or those claiming by,
through, or under __________ (mortgagor) by reason of the
invalidity of the foreclosure judgment entered in__________ (case caption)
due to plaintiff’s lack of standing.
3. In any chain of title where MERS has issued a mortgage discharge prior to July 3, 2014, you may insure without exception and subject to customary underwriting considerations.
4. In any chain of title where MERS has issued a mortgage discharge on or after July 3, 2014, you must obtain a confirmatory discharge from the lender for whom MERS was the nominee.
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THIS BULLETIN IS FURNISHED TO INFORM YOU OF CURRENT DEVELOPMENTS. AS A REMINDER, YOU ARE CHARGED WITH KNOWLEDGE OF THE CONTENT ON VIRTUAL UNDERWRITER AS IT EXISTS FROM TIME TO TIME AS IT APPLIES TO YOU, AS WELL AS ANY OTHER INSTRUCTIONS. OUR UNDERWRITING AGREEMENTS DO NOT AUTHORIZE OUR ISSUING AGENTS TO ENGAGE IN SETTLEMENTS OR CLOSINGS ON BEHALF OF STEWART TITLE GUARANTY COMPANY. THIS BULLETIN IS NOT INTENDED TO DIRECT YOUR ESCROW OR SETTLEMENT PRACTICES OR TO CHANGE PROVISIONS OF APPLICABLE UNDERWRITING AGREEMENTS. CONFIDENTIAL, PROPRIETARY, OR NONPUBLIC PERSONAL INFORMATION SHOULD NEVER BE SHARED OR DISSEMINATED EXCEPT AS ALLOWED BY LAW. IF APPLICABLE STATE LAW OR REGULATION IMPOSES ADDITIONAL REQUIREMENTS, YOU SHOULD CONTINUE TO COMPLY WITH THOSE REQUIREMENTS.