Conlin v. Mortgage Electronic Registration Systems, Inc.
2013 U.S. App. LEXIS 7207
| 6th Cir. | 2013Background
- Plaintiff refinanced in 2005 with Bergin for $240,000, securing a mortgage in which MERS was named as nominee for Bergin and successors.
- Bergin sold the note to the Real Estate Mortgage Investment Conduit, with U.S. Bank as trustee; MERS held the mortgage as Bergin’s nominee and GMAC serviced the loan.
- On May 15, 2008, Isaacs, on behalf of MERS, assigned the mortgage to U.S. Bank National Association as trustee.
- Orlans notified Conlin of default on Nov. 29, 2010 and indicated Orlans acted for the creditor/servicing agent; foreclosure proceeded under Mich. law.
- Foreclosure notices were published March 3, 10, 17, and 24, 2011; sheriff’s sale occurred March 31, 2011, with U.S. Bank the purchaser.
- Conlin filed suit Oct. 28, 2011; district court dismissed the case, and this court affirmed the dismissal on appeal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether lapse of redemption period allows setting aside for alleged assignment defects | Conlin asserts defects in assignment/participation in foreclosure are actionable. | Defects must show prejudice after lapse; claim fails without prejudice. | Plaintiff must show prejudice; no prejudice shown; case affirmed. |
| Whether robo-signed assignment or MERS incapacity supports relief | Assignment from MERS to U.S. Bank was forged or invalid; MERS lacked capacity to assign. | Even if defective, no prejudice shown and Kim limits voidable defects to prejudice. | Defects do not warrant relief absent prejudice. |
| Governing standard after Kim v. JPMorgan Chase Bank and related precedents | Foreclosure defects render sale void or voidable, depending on statute. | Kim holds defects are voidable, requiring prejudice; no prejudice here. | Correct to apply prejudice standard; foreclosure upheld. |
Key Cases Cited
- Kim v. JPMorgan Chase Bank, N.A., 825 N.W.2d 329 (Mich. 2012) (foreclosure defects are voidable, require prejudice to challenge after redemption period)
- Davenport v. HSBC Bank USA, 739 N.W.2d 383 (Mich. Ct. App. 2007) (earlier view; defective foreclosures void ab initio not followed in Kim)
- Sweet Air Inv., Inc. v. Kenney, 739 N.W.2d 656 (Mich. Ct. App. 2007) (require strong case of fraud/irregularity to set aside foreclosure after redemption period)
- Senters v. Ottawa Sav. Bank, FSB, 503 N.W.2d 641 (Mich. 1993) (foreclosure procedures and effect on post-sale remedies)
- Jackson Inv. Corp. v. Pittsfield Prods., Inc., 413 N.W.2d 99 (Mich. Ct. App. 1987) (prejudice standard for foreclosure-defect claims)