UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF MICHIGAN

SOUTHERN DIVISION

JOE THOMAS and

BERNICE THOMAS,

Plaintiffs,

No. 14-CV-14183

vs. Hon. Gerald E. Rosen

 Magistrate Judge Michael J. Hluchaniuk

JPMORGAN CHASE BANK, N.A.

and FEDEREAL HOME LOAN 

MORTGAGE CORPORATION,

Defendants.

___________________________________/

OPINION AND ORDER REGARDING DEFENDANTS’

MOTION TO DISMISS

I. INTRODUCTION

Plaintiffs Joe Thomas and Bernice Thomas commenced this suit in Wayne 

County Circuit Court on September 19, 2014, asserting claims against Defendants 

JPMorgan Chase Bank, N.A., and Federal Home Loan Mortgage Corporation, 

arising from the foreclosure sale of Plaintiffs’ home in Detroit, Michigan. 

Plaintiffs claim that Defendants conducted the foreclosure process without regard 

to Michigan’s statutory requirements -- in particular that Defendant JPMorgan 

Chase Bank, N.A. failed to include one of the mortgagee’s names in the Notice of 

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Foreclosure and that Defendant Federal Home Loan Mortgage Corporation is not a 

valid purchaser under Michigan foreclosure law. Defendants removed the case to 

this Court on October 30, 2014, and Defendants have now filed a Motion to 

Dismiss (Dkt. # 3). Collectively, Defendants argue that Plaintiffs lack standing to 

bring this suit because the statutory redemption period for the foreclosure has 

passed and, in the alternative, that Plaintiffs have failed to sufficiently allege any

violation of Michigan’s foreclosure laws.

Having reviewed and considered the parties’ briefs and supporting 

documents and the entire record of this matter, the Court has determined that the 

pertinent allegations and legal arguments are sufficiently addressed in these 

materials and that oral argument would not assist in the resolution of this motion. 

Accordingly, the Court will address the motion “on the briefs.” See L.R. 7.1(f)(2). 

II. PERTINENT FACTS

On December 19, 2008, Plaintiffs Joe Thomas and Bernice Thomas, a 

married couple, entered into a loan agreement with Defendant JPMorgan Chase 

Bank, N.A. (“Chase”) in the amount of $219,000 (“the Loan”). Pl’s Compl., Dkt. 

# 1-2, ¶ 6. The Loan was secured by a mortgage (“the Mortgage”) against the 

property at issue in this case, 17381 Pontchartrain Blvd., Detroit, Michigan 48203 

(“the Property”). Id. ¶¶ 4, 6; See also Mortgage, Dkt. # 3-2. The Mortgage was 

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recorded on December 30, 2008 in the Wayne County Records, with Chase acting 

as servicer for the Mortgage. Pl.’s Compl. ¶¶ 8, 12, see generally Mortgage.

Plaintiffs defaulted on the Loan at some point in 2013, and Chase 

subsequently initiated the foreclosure by advertisement process by mailing a 

Notice of Foreclosure to Plaintiffs and by publishing a Notice of Foreclosure in the 

Detroit Legal News once per week between October 14, 2013, and November 4, 

2013. Pl’s Compl. ¶¶ 12-13. Importantly for purposes of Plaintiffs’ theory, both 

the published and the mailed Notice of Foreclosure identified the mortgagor as 

“Joe Nathan Thomas, married,” but did not mention Bernice Thomas or identify 

her interest in the Loan, Mortgage, or Property. Id. ¶ 14.

The Loan remained in default, and accordingly a Sheriff’s Sale was held on 

March 20, 2014. Id. ¶ 17; see also Sherriff’s Deed, Dkt. # 3-3. Defendant Federal 

Home Loan Mortgage Corporation (“Freddie Mac”) won the auction with a bid of 

$109,387.43, and was granted a Sherriff’s Deed, which was recorded on April 3, 

2014. Sherriff’s Deed, Dkt. # 3-3, at 1. The statutory redemption period was set 

to expire on September 20, 2014. Id. at 1, 4.

On September 19, 2014, one day prior to the expiration of the redemption 

period, Plaintiffs brought this suit in Wayne County Circuit Court. Plaintiffs’

complaint asserts four claims for relief: wrongful foreclosure in violation of MCL

§ 600.3201 et seq. (Count I); quiet title (Count II); slander of title (Count III); and 

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violation of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq. (Count 

IV). Each claim, however, relies on the same two theories of relief: (1) that 

Chase’s failure to name Bernice Thomas as a party to the Mortgage renders the 

foreclosure proceedings invalid, and (2) that Freddie Mac is not a valid purchaser 

under MCL § 600.3228, and accordingly “was not authorized by statute to 

purchase the . . . Property.” See, e.g., Pl.’s Compl. ¶¶ 19-20. Defendants removed 

the action to this Court on October 30, 2014. Def.’s Removal, Dkt. # 1. The 

September 20, 2014 expiration of the redemption period has now passed, and 

Plaintiffs have not redeemed the Property.

III. DISCUSSION

A. Rule 12(b)(6) Standard

In deciding a motion brought under Rule 12(b)(6), the Court must construe 

the complaint in the light most favorable to Plaintiffs and accept all well-pled 

factual allegations as true. League of United Latin Am. Citizens v. Bredesen, 500 

F.3d 523, 527 (6th Cir. 2007). To withstand a motion to dismiss, however, a 

complaint “requires more than labels and conclusions, and a formulaic recitation of 

the elements of a cause of action will not do.” Bell Atl. Corp. v. Twombly, 550 

U.S. 544, 555 (2007). The factual allegations in the complaint, accepted as true, 

“must be enough to raise a right to relief above the speculative level,” and must 

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“state a claim to relief that is plausible on its face.” Id. at 570. “A claim has facial 

plausibility when the plaintiff pleads factual content that allows the court to draw 

the reasonable inference that the defendant is liable for the misconduct alleged.” 

Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). The Court must “construe the 

complaint in the light most favorable to the plaintiff, accept its allegations as true, 

and draw all reasonable inferences in favor of the plaintiff.” DirecTV, Inc. v. 

Treesh, 487 F.3d 471, 476 (6th Cir. 2007). However, the Court “need not accept as 

true legal conclusions or unwarranted factual inferences.” Id. (quoting Gregory v. 

Shelby Cnty., 220 F.3d 433, 446 (6th Cir. 2000)).

If the well-pled facts in Plaintiffs’ Complaint -- accepted as true -- are 

insufficient for Plaintiffs to recover on a claim, that claim must be dismissed. 

Iqbal, 556 U.S. at 680 (“Because the well-pleaded fact of parallel conduct, 

accepted as true, did not plausibly suggest an unlawful agreement, the Court held 

the plaintiffs’ complaint must be dismissed.”).

B. Plaintiffs Have Standing to Bring This Case

Defendants first argue that “a party claiming an interest in a property loses 

standing if he fails to redeem within the statutory redemption period.” Def.’s Mot. 

to Dismiss, at 4. Therefore, Defendants reason, Plaintiffs have lost the ability “to 

raise any claims related to the Property . . . and their Complaint should be 

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dismissed.” Id. at 5 (emphasis added). This issue has been the subject of much 

confusion, though recent Sixth Circuit law has provided some clarity. 

It is true that under Michigan’s foreclosure law, “[u]nless the 

premises. . . shall be redeemed within the time limited for such redemption . . . , 

[the sheriff’s] deed shall thereupon become operative, and shall vest in the grantee 

therein named, his heirs or assigns, all the right, title, and interest which the 

mortgagor had at the time of the execution of the mortgage.” M.C.L. § 600.3236. 

Based on a strict reading of the statute, one might infer that “the homeowner has 

no legal interest in the property that litigation might vindicate.” El-Seblani v. 

IndyMac Mortg. Servs., 510 F. App’x 425, 428 (6th Cir. 2013). Several recent 

unpublished decisions from the Michigan Court of Appeals have reached such a 

conclusion, predicating dismissals of post-redemption-period foreclosure 

challenges on the theory that plaintiffs lacked standing. Awad v. Gen. Motors 

Acceptance Corp., No. 302692, 2012 WL 1415166, at *4 (Mich. Ct. App. Apr. 24, 

2012), appeal denied, 493 Mich. 905 (2012) (“Upon the expiration of the 

redemption period, [Plaintiff] lost all right, title, and interest in the property and, 

therefore, lost her standing to sue.”); Overton v. Mortg. Elec. Registration Sys., No. 

284950, 2009 WL 1507342, at *1 (Mich. Ct. App. May 28, 2009) (“Once the 

redemption period expired, all of plaintiff’s rights in and title to the property were 

extinguished.”); Mission of Love v. Evangelist Hutchinson Ministries, No. 266219, 

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2007 WL 1094424, at *5 (Mich. Ct. App. Apr. 12, 2007) (“[D]efendants are 

correct that, after title vested in [Defendants] pursuant to the foreclosure, it was no 

longer necessary to resolve the subject matter of plaintiff’s lawsuit, i.e., the validity 

of the warranty deed, because plaintiff no longer had standing.”).

As this Court has recently noted, however, those decisions “are in tension 

with established standing principles.” Jackson v. Bank of Am., N.A., ___ F. Supp. 

3d ___, No. 14-CV-11073, 2014 WL 7157172, at *4 (E.D. Mich. Dec. 15, 2014). 

“When jurisdiction is premised on diversity of citizenship, a plaintiff must have 

standing under both Article III and state law in order to maintain a cause of 

action.” Morell v. Star Taxi, 343 F. App’x 54, 57 (6th Cir. 2009). Under Article 

III, a plaintiff has standing when he has sustained an injury that is “concrete and 

particularized” and “actual or imminent,” that injury is “fairly traceable to the 

challenged action of the defendant,” and “it is likely . . . that the injury will be 

redressed by a favorable decision.” Friends of the Earth, Inc. v. Laidlaw Envtl. 

Servs. (TOC), Inc., 528 U.S. 167, 180-81 (2000). Such standing is obviously 

present here -- Plaintiffs in this case claim concrete injuries resulting from an 

allegedly defective foreclosure procedure. And under Michigan’s standing 

requirements, “a litigant has standing whenever there is a legal cause of action.” 

Lansing Sch. Educ. Ass’n v. Lansing Bd. of Educ., 792 N.W.2d 686, 699 (Mich. 

2010). Michigan’s courts have provided such a cause of action in this context, 

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allowing plaintiffs to challenge the validity of a foreclosure through summary 

proceedings, M.C.L. § 600.5714, or by a separate lawsuit, El-Seblani, 510 F. 

App’x at 428. The obvious question then looms: “If plaintiffs litigating the 

validity of a foreclosure after the expiration of the redemption period meet these 

basic requirements, as Plaintiff does here, how can these standing principles be 

squared with the holdings of Awad, Overton, and Mission of Love?” Jackson, 2014 

WL 7157172, at *4.

A recent Sixth Circuit case provides the most complete answer. In ElSeblani, the court noted that longstanding Michigan state law has held that in cases 

seeking to set aside a foreclosure following the expiration of the statutory 

redemption period, plaintiffs face a “stringent” burden, and must allege “fraud or 

irregularity” that is “relate[d] to the foreclosure procedure itself.” El-Seblani, 510 

F. App’x at 429 (internal quotation marks omitted). Accordingly, the court 

assessed Awad, Overton, and Mission of Love, and concluded that those cases, 

despite making superficial references to standing, “[did] not turn on standing 

doctrine. . . . It is more accurate to say that the ‘fraud or irregularity’ claims in 

Overton, Awad, and Mission of Love lacked sufficient merit to meet the high 

standard imposed by Michigan law on claims to set aside a foreclosure sale.” Id.

(internal quotation marks omitted).

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Therefore, based on the reasoning of El-Seblani, the Court finds that 

Plaintiffs have standing in this case, under both Article III and Michigan state law, 

to bring their claims. As this Court has recently stated, a “plaintiff who meets both 

Article III and state standing requirements does not forfeit his standing when the 

statutory foreclosure redemption period expires.” Jackson, 2014 WL 7157172, at 

*5.

C. Plaintiffs Have Failed to Allege Sufficient Facts to Set Aside the 

Foreclosure

As discussed above, Plaintiffs’ complaint asserts four claims for relief, but 

each explicitly relies on the same two legal theories: (1) that Chase’s failure to 

name Bernice Thomas as a party to the Mortgage renders the foreclosure 

proceedings invalid, and (2) that Freddie Mac is not a valid purchaser under 

M.C.L. § 600.3228, which provides that “[t]he mortgagee, his assigns, or his or 

their legal representatives, may, fairly and in good faith, purchase the premises 

. . . at [the sheriff’s] sale.” In Count I, Plaintiffs assert a claim of wrongful 

foreclosure because the failure to name Bernice Thomas “was either a significant 

procedural irregularity, or was a fraud perpetrated by Chase” and because 

“Defendant Freddie Mac . . . was not authorized by [M.C.L. § 600.3228] to 

purchase the . . . Property.” Pl.’s Compl, ¶¶ 16, 20. In Count II, Plaintiffs assert a 

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claim of quiet title “because the notice of foreclosure was improper and Freddie 

Mac and Chase did not comply with MCL 600.3228.” Id. ¶ 27. In Count III, 

Plaintiffs assert a claim of slander of title because “the recording of the sheriff’s 

deed . . . was done with the specific intent that it confuse the chain of title” when 

the foreclosure notice only included Joe Thomas and because “[t]he recording of 

the Sheriff’s Deed was not authorized because Freddie Mac was not a foreclosing 

party as defined in the Michigan Statutes.” Id. ¶¶ 34-35. And in Count IV, 

Plaintiffs assert a claim of violation of the Fair Debt Collection Practices Act on 

the basis that Defendants unlawfully “[p]roceed[ed] with the foreclosure even 

though Freddie Mac was not authorized to be a foreclosing party under the 

Michigan statutes” and that Defendants “[i]ntentionally delet[ed] the name of 

Plaintiff Bernice Thomas from the foreclosure notice and thereby creat[ed] 

confusion.” Id. ¶ 39. Accordingly, because each Count turns on the proper 

resolution of Plaintiffs’ two main arguments, the Court addresses each of those 

arguments in turn, in lieu of discussing each Count individually.1

1 Plaintiffs do assert a third argument in their response brief, though the theory 

does not appear anywhere in the Complaint. In their brief, Plaintiffs argue that 

“Defendants have violated M.C.L. § 600.3204(3) because no assignment of 

mortgage was ever recorded.” Pl.’s Resp. to Def.’s Mot. to Dismiss, at 14. 

Plaintiffs are correct that, at least according to the complaint, the Mortgage was at 

some point assigned to Chase Home Finance, LLC, though Plaintiffs maintain that 

assignment occurred without proper power of attorney. Pl.’s Compl. ¶¶ 9-10. 

Plaintiffs’ argument, at least as the Court discerns it, is that M.C.L. § 600.3204(3) 

requires that “[i]f the party foreclosing a mortgage by advertisement is not the 

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A brief review of the relevant statutory provisions underlying Michigan 

foreclosures by advertisement is helpful before reaching each issue. M.C.L. § 

600.3201 provides that “every mortgage of real estate, which contains a power of 

sale, upon default being made in any condition of such mortgage, may be 

foreclosed by advertisement, in the cases and in the manner specified in this 

chapter.” The statute then provides several requirements for foreclosure by 

advertisement to proceed, including that “[a] default . . . has occurred,” “[t]he 

original mortgagee, a record chain of title must exist before the date of sale,” and 

that there is no proper record chain of title regarding the alleged assignment to 

Chase Home Finance. Plaintiffs also assert (seemingly contradictorily) that 

Freddie Mac was the party foreclosing the mortgage, leading to an alleged 

violation of M.C.L. § 600.3204(1)(d), which provides that the foreclosing party 

must be “either the owner of the indebtedness or of an interest in the indebtedness 

secured by the mortgage.” These arguments fail for several reasons. First, they are

not articulated in any of Plaintiffs’ Counts in the Complaint, nor have Plaintiffs 

attempted to amend the Complaint to include them. To that end, the Court now

invites Plaintiff to amend its Complaint as described below. But even if these 

arguments were properly presented in the Complaint, the Court is not convinced 

that they have merit. Plaintiffs are incorrect that Freddie Mac is the foreclosing 

party. A purchaser is not a foreclosing party with regard to M.C.L. § 600.3204 and 

accordingly is not subject to the recordation requirements which apply to assignees 

of the mortgage. See Moon v. Ocwen Loan Servicing, LLC, Nos. 11-000215-CH, 

12-000009-CH, 2013 WL 1689276, at *3 (Mich. Ct. App. Apr. 18, 2013) (holding 

that Freddie Mac, as purchaser of the foreclosed property, was not the party 

engaged in the action of foreclosing on the mortgage). M.C.L. § 600.3204(1)(d) 

refers to the party initiating the foreclosure. Plaintiffs’ argument regarding the 

allegedly faulty assignment to Chase Home Finance is similarly inapposite, as 

Chase Home Finance was not the party initiating the foreclosure -- that party was 

instead JPMorgan Chase Bank. See Pl.’s Compl. ¶ 12. Accordingly, any faulty 

chain of title with regard to Chase Home Finance is irrelevant here. And finally, as 

explained below, Plaintiffs have failed to explain how any of these alleged errors

prejudiced them by limiting their ability to redeem the property. See infra Part IIIC-1.

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mortgage . . . has been properly recorded,” and a record chain of title exists. Id. § 

600.3204. 

M.C.L. § 600.3208 then describes the process by which to initiate the 

foreclosure, requiring a notice that the mortgage will be foreclosed by sale of the 

premises. This notice “shall be given by publishing the same for 4 successive 

weeks at least once in each week”. The statute goes on to define the requirements 

of such notice, requiring that the names of the mortgagor, the original mortgagee, 

and the foreclosing assignee be included in every notice of foreclosure. M.C.L. § 

600.3212(a).

M.C.L. § 600.3216 prescribes the time and place of the foreclosure sale after 

all previous procedural requirements have been satisfied. “The sale shall be at 

public sale, between the hour[s]” of 9 AM and 4 PM in the “circuit court within the 

county in which the premises to be sold . . . are situated” and the property is to be 

sold “to the highest bidder.” Finally, M.C.L. § 600.3228 specifically allows that 

the “mortgagee, his assigns, or his or their legal representatives, may, fairly and in 

good faith, purchase the premises so advertised, or any pert thereof, at such sale.” 

Once the foreclosed-upon property is sold at the sheriff’s sale, the mortgagor 

is given six months to redeem the property. M.C.L. § 600.3240(7). Once this 

statutory redemption period lapses, however, the mortgagor’s “right, title, and 

interest in and to the property” are extinguished and the mortgagor no longer has 

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the right to assert any claims with respect to the property. Conlin v. Mortgage 

Electronic Registration Systems, Inc., 714 F.3d 355, 359 (6th Cir. 2013) (quoting 

M.C.L. § 600.3236) (internal quotation marks omitted); see also Bryan v. 

JPMorgan Chase Bank, 848 N.W.2d 482, 485 (Mich. Ct. App. Apr. 10, 2014) (“If 

a mortgagor fails to avail him or herself of the right of redemption, all the

mortgagor’s rights in and to the property are extinguished”). Filing a lawsuit 

immediately prior to the expiration of the redemption period will generally not toll 

the redemption period. See, e.g., Rubin v. Fannie Mae, 587 Fed. App’x. 273, 276 

(6th Cir. 2014) (“[O]nce the redemption period lapses, a former property owner 

may not assert any claims with respect to the property. The filing of a lawsuit --

even one filed before the expiration of the redemption period -- will not toll the 

redemption period.”); Jackson, 2014 WL 7157172, at *7; Whitehead v. Fed. Nat. 

Mortg. Ass’n, No. 12-CV-13840, 2013 WL 5353050, at *4 (E.D. Mich. Sept. 24, 

2013); Moriarity v. BNC Mortg., Inc., No. 10-13860, 2010 WL 5173830, at * 2 

(E.D. Mich. Dec.15, 2010); Nafso v. Wells Fargo Bank, N.A., No. 11-10478, 2011 

WL 1575372, at *2-3 (E.D. Mich. Apr.26, 2011); Mitan v. Fed. Home Loan Mtg. 

Corp., No. 10-13286, 2011 WL 4837502, at * 2 (E.D. Mich. Sept. 22, 2011); 

Overton, 2009 WL 1507342, at *1.

Because a mortgagor’s rights to challenge the foreclosure are substantially 

reduced once the redemption period has expired, Michigan courts have long held 

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that for a mortgagor to set aside a foreclosure by advertisement after expiration of 

the period, facts must be alleged which support a finding of fraud or irregularity in 

the foreclosure procedure itself, in addition to a demonstration that the mortgagor 

was prejudiced by the allegedly faulty procedures. Conlin, 714 F.3d at 359 

(“[O]nce the statutory redemption period lapses, [courts] can only entertain the 

setting aside of a foreclosure sale where the mortgagor has made a clear showing 

of fraud, or irregularity (internal quotation marks omitted)); see also Sweet Air 

Inv., Inc. v. Kenney, 739 N.W.2d 656, 659 (Mich. Ct. App. May 15, 2007) (“The 

Michigan Supreme court has held that it would require a strong case of fraud or 

irregularity, or some peculiar exigency, to warrant setting a foreclosure sale aside.”

(quoting United States v. Garno, 974 F. Supp. 628, 633 (E.D. Mich. 1997))); Kim 

v. JPMorgan Chase Bank, N.A., 825 N.W.2d 329, 338 (Mich. 2012) (“[T]o set 

aside the foreclosure sale, plaintiffs must show that they were prejudiced by 

defendants failure to comply.”).

Under this legal framework, the Court proceeds to address Plaintiffs’ legal 

theories in this case.

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1. Plaintiffs Have Failed to Allege Prejudice Resulting From 

Defendants’ Failure to Strictly Comply with the Naming Requirements of 

M.C.L. § 600.3212(a)

Plaintiffs’ first argument relies on the fact that when Chase initiated the 

foreclosure, the published Notice identified the mortgagor as “Joe Nathan Thomas, 

married,” but did not identify Bernice Thomas’s interest in the Loan, Mortgage, or 

Property. Plaintiff asserts that the Notice was “required to have some basic 

information,” specifically “the names of the mortgagors, the original mortgagee, 

and the foreclosing assignee.” Pl.’s Resp. to Def.’s Mot. to Dismiss, at 12 (citing 

M.C.L. § 600.3212). Plaintiffs assert that “from the notice, it appeared that only 

Joe Nathan Thomas had executed the mortgage,” and maintain that such an error 

“was either a significant procedural irregularity or was a fraud perpetrated by 

Chase.” Id. at 12-13.

Defects in the notice of foreclosure can vary in severity, and accordingly, 

can vary in the extent to which they can operate to set aside a foreclosure sale. In 

asserting that the failure to include Bernice Thomas on the Notice of Foreclosure 

amounts to a fraud or irregularity, Plaintiffs rely heavily on Oades v. Standard Sav. 

& Loan Ass’n, 241 N.W. 262 (Mich. 1932). In that case, the Michigan Supreme 

Court held that a foreclosure on property owned by the plaintiff, Mr. Oades, in 

which the notice failed to name Mrs. Oades as a mortgagor, was beyond a “slight 

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and inconsequential irregularit[y]” and led to a voiding of the mortgage. Id. at 

263-64.

The proper interpretation of Oades is not entirely clear in this context. 

Plaintiff is correct that Oades involved similar facts to those of this case, and the 

primary reasoning of Oades -- that the plain language of M.C.L. § 600.3212(a) 

requires that the “names of the mortgagor, the original mortgagee, and the 

foreclosing assignee” must be included in the notice of foreclosure by 

advertisement -- applies here as well. Clearly, the failure to include the names of 

all mortgagors in the Notice is at least some type of error. However, the age of 

Oades (a 1931 case) makes its application difficult in light of changes to modern 

Michigan foreclosure law. When Oades was decided, the framework requiring “a 

clear showing of fraud, or irregularity” in order to set aside a foreclosure sale was 

not so well-defined as it is today. See Schulthies v. Barron, 167 N.W.2d 784, 785 

(Mich. Ct. App. 1969). Accordingly, it is difficult to discern, from Oades alone, 

whether the error in the instant case rises to the level of fraud or irregularity as 

articulated in more recent cases. This Court has previously held that various minor 

mistakes regarding the foreclosure notice do not amount to fraud or irregularity.

See, e.g., Worthy v. World Wide Fin. Servs., Inc., 347 F. Supp. 2d 502, 509-10

(E.D. Mich. Dec. 13, 2004) (finding that a misstatement mortgagor’s gender in a 

foreclosure notice is a “slight or inconsequential mistake[]” that does not amount 

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to fraud or irregularity (internal quotation marks omitted)); Gallagher v. BAC 

Home Loans Servicing, L.P., No. 1:11-CV-1356, 2012 WL 1952349, at *7 (W.D. 

Mich. May 30, 2012) (finding the same regarding a misspelling of the mortgagors’

last name).

However, at this juncture the Court need not reach the question of whether 

Chase’s failure to identify Bernice Thomas in the Notice of Foreclosure constitutes 

fraud or irregularity, because Plaintiffs have failed to allege any prejudice resulting 

from the alleged error. As the Michigan Supreme Court has consistently held, 

defects in the foreclosure process, even when they amount to fraud or irregularity, 

render a foreclosure sale voidable, but can only void a foreclosure sale in 

circumstances where the error affected the plaintiff’s rights: 

[D]efects or irregularities in a foreclosure proceeding result in a 

foreclosure that is voidable, not void ab initio . . . . [T]o set aside the 

foreclosure sale, plaintiffs must show that they were prejudiced by 

defendant’s failure to comply with [the statute at issue]. To 

demonstrate such prejudice, they must show that they would have 

been in a better position to preserve their interest in the property 

absent defendant’s noncompliance with the statute.

Kim, 825 N.W.2d at 337 (emphasis added)). Here, Plaintiffs’ complaint provides 

not a single explanation of how Chase’s failure to include Bernice Thomas’s name 

in the Notice harmed Plaintiffs during the foreclosure process. Plaintiffs concede 

that they defaulted on the loan, and Plaintiff Joe Thomas received actual notice of 

the default via the mailed and published Notices. Plaintiffs have not alleged that

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Bernice Thomas somehow did not know about the foreclosure proceedings, and 

given that Plaintiffs were both apparently residing at the Property at the time the 

foreclosure was initiated and that Plaintiffs remained married during the 

foreclosure process, it is implausible to think that Bernice Thomas lacked, at a 

minimum, constructive notice of the foreclosure. The fact that Chase failed to 

strictly comply with the notice requirements imposed by M.C.L. § 600.3212(a) did 

not appear to affect any part of the foreclosure process, and accordingly, did not 

result in prejudice to Plaintiffs.

2

 See Lopez v. Bank of America, N.A., 920 F. Supp.

2d 798, 803 (W.D. Mich. Jan. 14, 2013) (Because Plaintiff had notice of her right 

to request a loan modification meeting, any failure of the defendants to comply 

with the notice requirements did not result in prejudice); see also Jackson 

Investment Corp. v. Pittsfield Products, Inc., 413 N.W.2d 99, 101 (Mich. Ct. App. 

Sep. 9, 1987) (No harm is suffered when “the mortgagor would have been in no 

2 Further, Plaintiffs have made no allegation that they would have been able to 

redeem the home. They do not contest that they were in default of the Loan at the 

time the foreclosure was initiated. Plaintiffs, in their complaint, do make various 

claims of prejudice, including that the property was sold at the sheriff’s sale for an 

amount below true market value, that the alleged errors in the foreclosure process 

made Plaintiffs “fearful of making mortgage payments,” and that the foreclosure

has damaged their credit. Pl.’s Compl., ¶ 23. But Plaintiffs make no claim that 

remedying the alleged errors in the foreclosure process would have prevented any 

of these harms from befalling Plaintiffs. Critically, Plaintiffs make no allegation 

that, had the statutory foreclosure process been followed perfectly, they would 

have been able to redeem or otherwise come into compliance with the Loan and 

subsequently retain the home. Accordingly, Plaintiffs have not sufficiently alleged 

the required prejudice to set aside the foreclosure sale.

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better position had notice been fully proper and the mortgagor lost no potential 

opportunity to preserve some or any portion of his interest in the property”).

Despite these problems, the Court recognizes that a mortgagee’s failure to 

properly list the names of all of the mortgagees in the notice for a foreclosure by 

advertisement is a potentially serious issue. Such an error, where it leads to a lack 

of actual notice to the mortgagors, could render the entire process unfair and 

undermine the policy intent behind the foreclosure by advertisement statutes. 

Accordingly, out of an abundance of caution, the Court invites Plaintiffs to amend 

their complaint to properly allege prejudice resulting from the error, if such 

prejudice exists. As described above, the Court is skeptical, as it seems likely that 

Joseph would have notified Bernice as soon as he learned of the foreclosure, 

rendering any error harmless. However, if Plaintiffs can present to the Court facts 

articulating the harm that they incurred directly resulting from the error, the Court 

will consider those facts. 

The Court further reminds Plaintiffs that mere blanket assertions regarding 

prejudice will not satisfy the requirements of Rule 12(b)(6). “[T]he tenet that a 

court must accept as true all of the allegations contained in a complaint is 

inapplicable to legal conclusions. Threadbare recitals of the elements of a cause of 

action, supported by mere conclusory statements, do not suffice.” Iqbal, 556 U.S. 

at 678; see also Jackson, 2014 WL 7157172, at *8 (applying this standard to the 

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foreclosure prejudice context). Any allegations regarding prejudice must also be 

plausible, and “[d]etermining whether a complaint states a plausible claim for 

relief will . . . be a context-specific task that requires the reviewing court to draw 

on its judicial experience and common sense.” Iqbal, 556 U.S. at 679. Increased 

specificity allows the Court to better evaluate the plausibility of Plaintiffs’ claims

for relief, and the Court accordingly encourages Plaintiffs to clearly articulate the 

prejudice suffered with specific, supportable facts.

2. Plaintiffs’ Argument Made Pursuant to M.C.L. § 600.3228 is 

Based on a Misreading of the Statute

Plaintiffs’ second argument that the foreclosure was faulty is that while 

M.C.L. § 600.3228 allows that “[t]he mortgagee, his assigns, or his or their legal 

representatives may, fairly and in good faith, purchase” property foreclosed by 

advertisement, “[c]learly Freddie Mac was not the mortgagee nor an assignee of 

the mortgage[,] was a stranger to title[,]” and accordingly “was not statutorily 

authorized to purchase the property at the sheriff’s sale.” Pl.’s Resp. to Def.’s Mot. 

to Dismiss, Dkt # 5, at 17.

Plaintiffs’ argument is based on a misunderstanding of the statute. Section 

600.3228 does not state anywhere in its text that only the “mortgagee, his assigns, 

or his or their legal representatives” may purchase the property at the sheriff’s sale. 

Instead, it provides a limitation on those specific purchasers -- their purchase must 

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be made “in good faith,” whereas purchases from other purchasers are not so 

conditioned. Other provisions also make clear that the universe of potential 

purchasers is not limited. M.C.L. § 600.3216 -- the primary provision governing 

the sheriff’s sale -- simply states that “the sale shall be made . . . to the highest 

bidder.” That provision does not contemplate any limitation on the individuals 

who may bid at the sale. Indeed, clear language of cases from both this Court and 

Michigan state courts makes clear that purchasers other than the mortgagee may 

purchase property sold at the sheriff’s sale. See, e.g., Grayer v. JPMorgan Chase 

Bank, Nat. Ass’n, No. 12-11125, 2013 WL 4414867, at *4 n.6 (E.D. Mich. Aug. 

15, 2013) (describing § 600.3228 as a “permissive and nonrestrictive statutory 

provision”); Ruby & Associates, P.C. v. Shore Fin. Servs., 741 N.W.2d 72, 77 

(Mich. Ct. App. 2007) vacated on other grounds, 745 N.W.2d 752 (Mich. 2008)

(“Upon [sheriff’s] sale, the purchaser, including potentially the mortgagee, 

acquires a sheriff’s deed.”); Pulleyblank v. Cape, 446 N.W.2d 345, 347 (Mich. Ct. 

App. 1989) (noting that “as a purchaser under the foreclosure sale, a mortgagee 

stands in the same position as any other purchaser,” and discussing the 

circumstances “[i]f a third party had bid and purchased [the] property”).

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IV. CONCLUSION

For all of the foregoing reasons, 

IT IS HEREBY ORDERED that Plaintiffs, having failed to adequately 

allege prejudice in their Complaint, will have 10 days to file an amended 

complaint with the Court. If Plaintiffs fail to file an amended complaint, the Court 

will enter an order dismissing this case for the reasons described in this Opinion.

IT IS FURTHER ORDERED that Defendants’ Motion to Dismiss (Dkt. # 3)

is DENIED as premature. Should Plaintiffs file an amended complaint, 

Defendants may refile their Motion, and may include supplemental argument 

regarding any new claims made in Plaintiffs’ amended complaint.

IT IS SO ORDERED.

s/Gerald E. Rosen 

Chief Judge, United States District Court

Dated: May 12, 2015

I hereby certify that a copy of the foregoing document was served upon the parties 

and/or counsel of record on May 12, 2015, by electronic and/or ordinary mail.

s/Julie Owens 

Case Manager, (313) 234-5135

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