Editor: David Reiss
Brooklyn Law School

May 10, 2013

Michigan Federal District Court Finds that Holder of Unsigned Note Can Enforce

By David Reiss

The District Court for the Eastern District of Michigan affirmed the Bankruptcy Court in Mentag v. GMAC Mortgage LLC, No. 12-13350 (Feb. 8, 2013), finding that the holder of the note was entitled to enforce it and has standing to challenge the automatic stay.  The court said that the “real issue is whether GMAC Mortgage LLC [the holder] was a holder of the note on the date it filed its motion to lift the stay.” (8)

Under Michigan law, a holder is either “in possession of an unsigned note that is made out to it” or is “in possession of a signed note.” (8) Based on the evidence, the Court found that GMAC Mortgage LLC was “the holder of the note when it challenged the stay.” (8) The court also noted that “a holder of the note may enforce it, notwithstanding that the holder may have sold the note and failed to transfer it to the purchaser.” (8-9)

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