Editor: David Reiss
Brooklyn Law School

March 14, 2013

Michigan District Court Dismisses Mortgagor’s Claims to Void a Foreclosure Sale Because the Redemption Period Had Expired

By Abigail Pugliese

In Duff v. Federal Nat. Mortg. Ass’n, No. 2:11-cv-12474, 2012 WL 692120 (E.D. Mich. Feb. 29, 2012), the District Court dismissed Mortgagor Plaintiff’s claims to void the foreclosure sale because Plaintiff failed to state a claim and the period of redemption had expired.

In 2007, Mortgagor Plaintiff refinanced his home with Quicken Loans, Inc., and MERS was the mortgagee. Subsequently, MERS assigned the mortgage to Defendant JP Morgan Chase Bank (“Chase”). Plaintiff defaulted and Chase initiated foreclosure by advertisement. “Plaintiff’s house was sold at a Sheriff’s Sale to Defendant Fannie Mae.” The Sheriff’s deed was executed and the six-month redemption period had ended when Plaintiff was served with a complaint to terminate Plaintiff’s tenancy of the property. Plaintiff then commenced an action asserting four separate claims, and Defendant moved for summary judgment.

Before dismissing each of Plaintiff’s claims individually, the District Court noted that Plaintiff lacks standing to bring any claim regarding this matter. Since Plaintiff commenced the lawsuit after the redemption period and did not show irregularity, “Plaintiff . . . lack[s] standing to challenge the foreclosure of, and his eviction from, the property.”

In Plaintiff’s first claim, Plaintiff, relying on Residential Funding v. Saurman, 805 N.W.2d 183 (Mich. 2011) and Bakri v. MERS, No. 297962, 2011 WL 3476818 (Mich. Ct. App. Aug. 9, 2011), argued that Defendant had no power to foreclose because the “assignment is not sufficient to establish a record chain of title as required by MCL §600.3204 since MERS did not have an interest to assign to Chase.” However, Bakri v. Mers relied on Residential Funding v. Saurman in reaching this conclusion. Later, Residential Funding v. Saurman was overturned on appeal. Accordingly, the Court here declined to follow Bakri v. Mers and dismissed this claim.

Counts Two, Three, and Four were similarly dismissed. Plaintiff claimed “defendants violated the Home Affordable Modification Program . . . under both a negligence theory (Count II) and a breach of contract theory (Count III).” These arguments both failed because the Home Affordable Modification Program provides no private right of action. Lastly, Plaintiff asserted an equitable estoppel claim. The District Court dismissed this claim since it is a defense and cannot be asserted by a plaintiff in a cause of action.

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