Michigan High Court To Decide Impact Of Failure To Record Mortgage On Subsequent Foreclosure Sale

In Lansing, Michigan, Legal Newsline reports:

• The Michigan Supreme Court, in an order last month, said it will hear an appeal by one of the nation's largest mortgage servicers in a case over a state foreclosure law.
  
  
• In January, the state Court of Appeals ruled unanimously in favor of plaintiffs Euihyung Kim and In Sook Kim. The husband and wife sued JPMorgan Chase Bank N.A. in November 2009 seeking, among other relief, to set aside a sheriff's sale of their home. When the plaintiffs defaulted on a $615,000 loan from Washington Mutual Bank to refinance their home, JPMorgan Chase sought to foreclose by advertisement. In June 2009, the mortgage servicer purchased the property at a sheriff's sale for $218,000.
  
  
• The appeals court ruled that JPMorgan Chase was not authorized to proceed with the sale under Michigan's foreclosure by advertisement statute. The defendant, it said, failed to record its mortgage interest before the sale as required by the law. Soon after the court's ruling, in February, JPMorgan Chase sought review by the state's high court.
  
  
• In a one-page order filed May 9, the Court granted JPMorgan Chase's application. The appeal will be limited to the issues of whether the defendant acquired the couple's loan by operation of law and, if so, whether the foreclosure by advertisement statute applies to the acquisition of a mortgage by operation of law, the Court wrote.
  
  
• Also, the Court said it would review if the foreclosure procedures in the case were "flawed," and whether the foreclosure, itself, is voidable [Editor's Note: or, according to the one page order, void ab initio]. In its order, the Court invited the Michigan Association of Bankers, the Real Property Law Section of the State Bar of Michigan, and the Consumer Law Section of the State Bar of Michigan to file amicus briefs.

Source: Mich. SC to review foreclosure case against JPMorgan Chase.