Foreclosure sale challenge; MCL 600.3201 et seq.; Issue rendered moot by the filing of an Affidavit Expunging Sheriff's Deed on Mortgage Sale Filed Pursuant to MCL 565.451a; Jackson v. Thompson-McCully Co., LLC; Challenges to the underlying mortgage; Effect of failure to comply with the licensing provisions of the Consumer Mortgage Protection Act (CMPA)(MCL 445.1631 et seq.); MCL 445.1680; Mortgage Electronic Registration Systems, Inc. (MERS)
The court concluded that it need not address the validity of the foreclosure proceedings in this case because the issue was rendered moot by the filing of an Affidavit Expunging Sheriff's Deed on Mortgage Sale Filed Pursuant to MCL 565.451a. Thus, the court vacated the portion of the trial court's order granting the defendants summary disposition as to the validity of the foreclosure proceedings. However, the court rejected the plaintiff's challenges to the underlying mortgage and affirmed the trial court's dismissal of his claims. Plaintiff and his ex-wife executed the mortgage at issue for an $110,000 loan. The mortgage secured a promissory note for the amount of the loan. The mortgage designated defendant-MERS as the nominee for the lender, Southstar Funding. When payments were not made as prescribed by the note, MERS retained the defendant-law firm to initiate statutory foreclosure proceedings pursuant to MCL 600.3201 et seq. and the mortgage provisions. Notice of the foreclosure sale was published in the local newspaper for four consecutive weeks and posted on the front door of the home. After several adjournments of the sale date, MERS purchased the property at a sheriff's sale on 8/22/08. The date of purchase was the same date plaintiff's statutory right to redemption expired. MERS then conveyed the property to defendant-Deutsche Bank National Trust by quit claim deed. Deutsche Bank recorded its deed on 9/22/08, later initiated eviction proceedings, and was granted a judgment of possession. After plaintiff unsuccessfully appealed that judgment in circuit court, he filed this case, requesting that the mortgage be declared void because Southstar was not properly licensed and its closing agent used "deceptive practices." He also requested that the foreclosure sale and all subsequent actions be declared void on the basis he did not receive actual, personal notice of the foreclosure and because the promissory note was not recorded. The court noted that in the Affidavit Expunging Sheriff's Deed on Mortgage Sale Filed Pursuant to MCL 565.451a (filed with the county register of deeds on 5/17/11), MERS asserted that it would not rely on the foreclosure sale and would treat the sale as having not been held and void ab initio. Thus, the underlying mortgage would remain in full force as reflected by the register of deeds. Since this was "the relief ultimately sought by plaintiff," the court could offer him no further relief and the issue of the validity of the foreclosure proceedings was moot. As to his challenges to the mortgage, the court saw no basis on which to declare "the mortgage's failure to specify the payment terms a material defect where the mortgage expressly indicates that the promissory note governs the payment terms." Further, whether Southstar was licensed was irrelevant to the validity of the mortgage since MCL 445.1680 expressly indicates the failure to comply with the licensing provisions of the CMPA "cannot alone affect the validity of a mortgage." Affirmed in part, vacated in part, and remanded for entry of an order consistent with the court's opinion.
Full Text Opinion
State Bar of Michigan
306 Townsend St
Lansing, MI 48933-2012