Yates v. U.S. Bank National Ass'n
912 F. Supp. 2d 478
E.D. Mich.2012Background
- HAMP was created under TARP to stabilize finances and preserve homeownership; the Plan offered a Trial Period Plan (TPP) leading to a permanent modification if conditions were met.
- Wells Fargo, as servicer, signed a Servicer Participation Agreement with Fannie Mae to participate in HAMP and review defaulted/default-risk loans for modification.
- Plaintiffs Angela, Gary, and Jeramie Yates faced default in 2008 and sought modifications after May 2008 foreclosure notices.
- In April 2009, Defendants offered an April 2009 Modification Agreement; Plaintiffs defaulted on initial payment and ASC later executed the modification.
- Plaintiffs later pursued HAMP eligibility; ASC reviewed and accepted a 90-day HAMP Trial with monthly payments, but permanent modification was not granted and foreclosed in May 2010.
- Plaintiffs filed a four-count complaint in Washtenaw County and removed to federal court; counts include breach of contract, promissory estoppel, and notice-related claims, with Count III (Mortgage Brokers, Lenders and Servicers Act) conceded non-viable.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing to challenge foreclosure | Yates asserts standing despite redemption period expiry. | Defendants argue lack of standing after redemption period. | Plaintiffs have standing to challenge foreclosure. |
| Breach of contract via Plan terms | Plan constitutes an offer that became binding upon Plaintiffs’ acceptance. | Plan required ASC’s signature and delivery to become binding; ambiguity exists. | Genuine dispute on contract formation; not entitled to summary judgment on Count I. |
| Promissory estoppel viability | ASC representations induced reliance and refinancing opportunities were foregone. | Subject to statute of frauds; no writing to enforce. | Not barred at summary judgment; fact questions remain. |
| Failure to provide proper notice of foreclosure sale | Notice and adjournment procedures may have violated MCL 600.3220; prejudice shown. | Defendants complied with some notice requirements; adjournments undocumented. | Genuine disputes as to notice and prejudice; summary judgment denied for Count IV. |
Key Cases Cited
- Crown Tech. Park v. D & N Bank, F.S.B., 242 Mich.App. 538 (2000) (statute of frauds and enforceability in financing)
- Markoff v. Tournier, 229 Mich. 571 (1925) (foreclosure sales may be set aside for fraud or irregularity)
- Sweet Air Inv. Inc. v. Kenney, 275 Mich.App. 492 (2007) (very good reasons required to set aside statutory foreclosure)
- United States v. Garno, 974 F.Supp. 628 (1997) (burden on party challenging foreclosure sale)
- Bramlage v. Wells Fargo Home Mortg., Inc., 144 Fed.Appx. 489 (2005) (adjournment validity and notice requirements)
- Wonderland Shopping Ctr. Venture Ltd. P’ship v. CDC Mortg. Capital, Inc., 274 F.3d 1085 (6th Cir.2001) (contract interpretation and harmonization of terms)