858 N.W.2d 69
Mich. Ct. App.2014Background
- Foreclosure-by-advertisement dispute over 2458 Barnsbury Rd, East Lansing, MI.
- Freddie Mac purchased the property at a 2011 sheriff's sale following a 2011 default and 2012 redemption deadline.
- Defendants challenged foreclosure as Fifth Amendment due process violation and improper chain of title under MCL 600.3204(3).
- District court granted summary disposition for Freddie Mac; circuit court reversed, holding Freddie Mac may be a governmental actor and the chain-of-title issue valid.
- FHFA conservatorship placed Freddie Mac under conservatorship in 2008, with broader control that defendants argued made Freddie Mac a government actor.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Freddie Mac is a governmental entity for due process. | Freddie Mac is governmental under Lebron framework. | Freddie Mac is not a government actor under Lebron. | Freddie Mac is not a governmental entity for constitutional purposes. |
| Whether the foreclosure complied with MCL 600.3204(3). | CMI acquired mortgage via merger; required recording under 600.3204(3). | Merger suffices; no additional assignment needed. | Not reached due to lack of prejudice under Kim; issues remain moot. |
| Whether due process was violated due to alleged governmental control. | Freddie Mac’s conservatorship violated notice/hearing requirements. | No Fifth Amendment due process violation. | Due process not violated; claim fails as a matter of law. |
| Remedy for the erroneous circuit court ruling. | Reinstate district court order terminating possession. | Maintain circuit court’s reversal. | Reversed and remanded for reinstatement of district court’s order. |
Key Cases Cited
- Lebrón v. Nat’l R. Passenger Corp., 513 U.S. 374 (1995) (framework for governmental entity status of specially created corporations)
- Regional Rail Reorganization Act Cases, 419 U.S. 102 (1974) (permanence of government control does not automatically negate government status)
- Kim v. JPMorgan Chase Bank, N.A., 493 Mich. 98 (2012) (prejudice requirement to challenge noncompliance with 600.3204(3))
- Nat’l Airport Corp. v. Wayne Bank, 73 Mich. App. 572 (1977) (requirement of state action for due process claims)
- Mik v. Fed. Home Loan Mtg. Corp., 743 F.3d 149 (2014) (Sixth Circuit: Freddie Mac not a government actor under Lebron)