Issues: Judicial foreclosure; Whether the plaintiff had authority to enforce the note that was secured by the mortgage; MCL 440.3301; Bowles v. Oakman; "Holder" defined (MCL 440.1201(2)(u)); Waiver of "standing" challenge; Acorn Inv. Co. v. Michigan Basic Prop. Ins. Ass'n; Whether the mortgage was improperly recorded under MCL 600.2907a and MCL 565.25; Federal Nat'l Mtg. Ass'n v. Lagoons Forest Condo. Ass'n; "Encumbrance" defined; Quiet title claim; Special Prop. VI, LLC v. Woodruff; The doctrine of "unclean hands"; McFerren v. B & B Inv. Group; Mortgage Electronic Registration Systems, Inc. (MERS)
Court: Michigan Court of Appeals (Unpublished)
Case Name: Aurora Loan Servs., LLC v. Johnson
e-Journal Number: 57906
Judge(s): Per Curiam – Wilder, Saad, and K.F. Kelly
The court held that the trial court did not err in finding that plaintiff-Aurora Loan Services was entitled to enforce defendant-Johnson's note under MCL 440.3301(i), and Johnson waived her standing challenge. It rejected her claim that the mortgage was improperly recorded under MCL 600.2907a and MCL 565.25, entitling her to summary disposition of Aurora's judicial foreclosure complaint. Further, she failed to establish superior title to support her quiet title claim. Thus, the court affirmed the trial court's order granting Aurora summary disposition, dismissing Johnson's counterclaims, and ordering a judgment of judicial foreclosure to be entered. "Johnson's overarching argument on appeal is that Aurora was not the owner of any interest in the note, but rather was just the servicer with no authority to enforce the note," and thus, the trial court improperly granted it summary disposition. The court disagreed, noting that the trial court "found no genuine issue of material fact that the note had been endorsed in blank to Aurora and that Aurora was the holder of the note." Further, "MCL 440.3301 expressly provides that neither ownership nor rightful possession is required to enforce the note. As the maker of the note, Johnson could not defend the action on that basis." As to her standing argument, the court noted that before the judicial foreclosure action was filed, "Johnson recognized Aurora's interest by attempting to mitigate her losses with Aurora. Johnson requested both loan modification and a short sale from Aurora." She only challenged its interest after Aurora filed the judicial foreclosure action. As to her argument regarding MCL 600.2907a and MCL 565.25, "when Johnson executed a mortgage in favor of MERS, she encumbered or attached a claim to her real property. Neither the assignment of the mortgage by MERS to Aurora or the recording by Aurora attached any additional liability to the real property." Thus, "when Aurora recorded the assignment of mortgage, it did not 'encumber property through the recording' under MCL 600.2907a(1)." Further, its "mere filing of the assignment of the mortgage does not establish the necessary intent under MCL 600.2907a. The facts contained in the assignment were presumptively correct," and while she alleged "unsound practices in the lending industry, such as robo-signing, she failed to prove any malice actually occurred in this case."
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