Deutsche Bank National Trust Company v. Tracey L Kevelighan
327151
| Mich. Ct. App. | Aug 16, 2016Background
- Deutsche Bank filed a foreclosure on the Lamplighter property after obtaining a 2013 circuit court order that its March 17, 2006 purchase money mortgage was a valid first-priority lien.
- Kevelighans held the Lamplighter property as tenants by the entirety; the deed was from Cendant Mobility Financial Corporation (2005).
- Tracey signed the March 17, 2006 adjustable rate mortgage in favor of WMC Mortgage Corporation for $277,600; the mortgage was later assigned to Deutsche Bank.
- By 2011, Tracey defaulted; a federal suit against Deutsche Bank and others was dismissed with appellate affirmation.
- The trial court later granted summary disposition in Deutsche Bank’s favor on Count I, finding the mortgage to be a valid purchase money mortgage and a first-priority lien.
- The foreclosure judgment stated the Lamplighter property would be sold as a single parcel with proceeds applying to the debt; Kevin and Tracey’s entireties interest was encumbered by the mortgage.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Deutsche Bank may foreclose despite tenancy by the entirety. | Deutsche Bank holds a purchase money mortgage; lien priority survives. | Tenancies by the entirety preclude foreclosure by a mortgage signed by one spouse. | Foreclosure permitted; purchase money mortgage encumbers entirety estate. |
| Whether one spouse signing the mortgage suffices when property is held by both as tenants by the entirety. | Mortgage deemed attached to property as purchase money; valid lien. | One-spouse signature cannot encumber entireties property. | One-spouse signing suffices under purchase money doctrine; lien valid against entirety. |
| How foreclosure proceeds are to be distributed among the debt and junior interests. | Full proceeds applied to debt; debt is secured by mortgage. | Possibly分net proceeds allocated differently due to spouses’ interests. | Full proceeds applied to debt; neither spouse has separate interest free of mortgage. |
Key Cases Cited
- Graves v. American Acceptance Mortgage Corp. (On Rehearing), 469 Mich 608 (Mich. 2004) (purchase money mortgage ties to title; one transaction)
- Fecteau v. Fries, 253 Mich 51 (Mich. 1931) (mortgage and title transfer simultaneous; no disruption by other liens)
- Rogers v. Rogers, 136 Mich App 125 (Mich. Ct. App. 1984) (tenancy by entirety limits one-spouse alienation; encumbrance rules)
- Berry v. State Farm Mut. Auto Ins. Co., 219 Mich App 340 (Mich. Ct. App. 1996) (standard for reviewing trial court factual findings; clear error guidance)