Reading the Illinois Real Estate Statute of Mortgage Records Very Closely

by Isaac Benmergui, Esq on March 28, 2014

Post image for Reading the Illinois Real Estate Statute of Mortgage Records Very Closely

This may be confusing especially since this involves cyberspace, but oftentimes real estate law can fool people into thinking that there’s a violation when, in fact, there is not. Case in point: we have Macon County vs. a mortgage services company called MERSCORP, Inc. over a claim stating real estate violation of a particular Illinois statute mandating that all mortgages be recorded with the county according to property location.bridge

Here’s the details of the real estate case: apparently, MERSCORP, Inc. operates on an online system for registration. Bear in mind this important fact, because mortgages registered in their system don’t actually get recorded in real life with county land registries. That’s what this particular Illinois statute is referring to; however, MERSCORP, Inc. is apparently not responsible for that. This lawsuit states that the company is, however.

While MERSCORP does become the mortgagee on record for purposes of recording, those assignments it sends to banks for their mortgages end up not being substantive. They only refer to promissory notes and not actual “mortgages,” per se, hence they’re simply ‘repeated assignments’ listed on their own online registry. Additionally, MERSCORP pays a recording fee for all assignees.

This was confirmed by the Seventh Circuit, rejecting the county’s real estate lawsuit against the company, basically stating that MERSCORP is nothing more than a “third bridge party” transferring the mortgage assignments to the banks for then proper recording by the banks in question. Think of it as an actual production line – MERSCORP just happens to be a part of that line. Needless to say, a higher court affirmed the district court’s dismissal of another lawsuit, filed by another county. It turns out that this particular online system is, in fact, lawful.

Previous post:

Next post: