Abdullah El-Seblani v. IndyMac Mortgage Services
510 F. App'x 425
6th Cir.2013Background
- El-Seblani bought his home in 2007 with a loan from IndyMac Bank, with MERS listed as mortgagee and IndyMac as lender.
- MERS assigned its interest to OneWest on June 22, 2010; the assignment was recorded July 1, 2010.
- A default notice and modification-meeting rights were communicated to El-Seblani after the assignment; a Detroit Legal News notice appeared June 25, 2010.
- IMS sent a July 14, 2010 modification offer; El-Seblani sent payment but not the signed modification; OneWest deemed the offer expired and foreclosed.
- Foreclosure notices were published in July–August 2010; Fannie Mae purchased the property at sheriff’s sale on September 2, 2010.
- El-Seblani filed suit February 2011; the district court granted summary judgment on all counts; redemption period expired before removal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing to challenge foreclosure after redemption | El-Seblani has Article III and state-law standing to test the sale. | Post-redemption rights extinguish interests, limiting standing to challenge. | El-Seblani has Article III standing; Michigan law allows an equitable extension if fraud or irregularity is shown. |
| Applicability of Michigan Mortgage Act to OneWest/IMS | Act applies to lenders/servicers and affiliates; OneWest/IMS fall within coverage. | Act excludes depository financial institutions and affiliates. | Act does not apply to OneWest/IndyMac/IMS; summary judgment proper on this claim. |
| Breach of contract based on July 14 modification offer | Acceptance of modification occurred and foreclose was improper. | El-Seblani failed to follow the offer’s acceptance conditions (signed agreement and payment by deadline). | No contract formed; foreclosure not breach of contract. |
| Promissory estoppel | The modification promise induced reliance and forbearance. | Promises were conditional; reliance not justified unless conditions were met. | No reasonable reliance; promissory estoppel failed. |
| Notice under Mich. Comp. Laws § 600.3205a | Notice may have defects; prejudicial effect argued. | Notice complied with statutory requirements and was not prejudicial. | Notice satisfied statutory requirements; no prejudicial harm. |
Key Cases Cited
- Mfrs. Hanover Mortg. Corp. v. Snell, 370 N.W.2d 401 (Mich. 1985) (mortgagor may challenge statutory foreclosure in court)
- Schulthies v. Barron, 167 N.W.2d 784 (Mich. Ct. App. 1969) (stringent standards for extending redemption period)
- Sweet Air Inv., Inc. v. Kenney, 739 N.W.2d 656 (Mich. Ct. App. 2007) (fraud or irregularity requires strong showing to set aside foreclosure)
- Kubicki v. Mortgage Electronic Registration Sys., 807 N.W.2d 433 (Mich. Ct. App. 2011) (high standard for fraud or irregularity to extend foreclosure)
- Richard v. Schneiderman & Sherman, PC, 818 N.W.2d 334 (Mich. Ct. App. 2011) (equitable extension for redemption may be allowed; prompt action standards)
- Freeman v. Wozniak, 617 N.W.2d 46 (Mich. Ct. App. 2000) (equitable extension must be for fraud, accident, or mistake)
- Bivans Corp. v. Comm. Nat’l Bank of Pontiac, 166 N.W.2d 270 (Mich. Ct. App. 1968) (conditional promises and reliance issues in estoppel)
- Pakideh v. Franklin Comm. Mortg. Grp., Inc., 540 N.W.2d 777 (Mich. Ct. App. 1995) (acceptance must conform strictly to offer terms)
- Mfrs. Hanover Mortg. Corp. v. Snell, 370 N.W.2d 401 (Mich. 1985) (mortgage validation proceedings and standing)
- Harper Bldg. Co. v. Kaplan, 52 N.W.2d 536 (Mich. 1952) (contract formation principles in acceptance)
- Markoff v. Tournier, 201 N.W.2d 888 (Mich. 1925) (fraud/irregularity standard for foreclosure set-aside)