NOT RECOMMENDED FOR PUBLICATION

File Name: 14a0746n.06

No. 13-1477

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

LINDA D. BERNARD,

Plaintiff-Appellant,

v.

FEDERAL NATIONAL MORTGAGE 

ASSOCIATION and WELLS FARGO BANK, N.A.,

Defendants-Appellees,

and 

FEDERAL HOUSING FINANCE AUTHORITY,

 Intervenor-Appellee.

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ON APPEAL FROM THE 

UNITED STATES DISTRICT 

COURT FOR THE EASTERN 

DISTRICT OF MICHIGAN

BEFORE: McKEAGUE and GRIFFIN, Circuit Judges; and POLSTER, District Judge.*

GRIFFIN, Circuit Judge.

Defendants Federal National Mortgage Association (“Fannie Mae”) and Wells Fargo 

Bank foreclosed on plaintiff Linda Bernard’s property located at 17144 Wildemere Street in 

Detroit. Plaintiff brought the instant action seeking to set aside the foreclosure. The district 

court granted defendants’ motion to dismiss or for summary judgment. Plaintiffs appealed, and

we affirm. 

 

*

The Honorable Dan A. Polster, United States District Judge for the Northern District of 

Ohio, sitting by designation. 
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I.

The district court cogently summarized the facts of this case as follows: 

On April 24, 2006, plaintiff executed a mortgage on the Wildemere Property and 

a promissory note in the amount of $259,500.00. Plaintiff’s 30-year mortgage on 

the Wildemere Property identifies Mortgageit, Inc. as lender, plaintiff as 

borrower, and MERS as mortgagee and nominee for the lender. The mortgage

was recorded on March 23, 2007. 

On April 21, 2011, MERS, as nominee for Mortgageit, Inc., assigned the

mortgage to Wells Fargo. This assignment was recorded on April 27, 2011. 

Plaintiff defaulted on her mortgage loan, and attempted to work out a loan

modification after her receipt of a notice letter from Wells Fargo’s counsel, Trott 

& Trott, and after notice was published informing her of the right to request a 

meeting with the mortgage holder or mortgage servicer. Plaintiff received some 

assistance in obtaining either a loan modification or a short sale from a Housing 

Specialist at City Vision Alliance. However, plaintiff did not obtain either a loan 

modification or a short sale. 

Accordingly, Wells Fargo pursued foreclosure by advertisement under [Mich. 

Comp. Laws] §§ 600.3201, et seq. On August 2, August 9, August 16 and 

August 24, 2011, Wells Fargo’s counsel had notice of an August 31, 2011 

sheriff’s sale of the Wildemere Property published in the Detroit Legal News, and 

a similar notice was posted on the Wildemere Property on August 5, 2011. 

The original Sheriff’s sale date of August 31, 2011 was adjourned to November 9, 

2011. On November 9, 2011, a Sheriff’s sale was held, and Wells Fargo was the 

purchaser of the Wildemere Property for $265,707.69. The Sheriff’s Deed was 

recorded on November 18, 2011. 

On November 11, 2011, Wells Fargo quit claimed the Wildemere Property to 

Fannie Mae. The Quit Claim Deed was recorded on December 12, 2011. 

Under Michigan law, plaintiff had six months to redeem the Wildemere Property. 

See [Mich. Comp. Laws] § 600.3240. The six-month redemption period expired 

on May 9, 2012. 

* * *

Fannie Mae subsequently brought an action in Michigan’s 36th District Court in 

Detroit, Michigan against plaintiff and all other occupants of the Wildemere 

Property to recover possession of the property. On June 25, 2012, the 36th 

District Court adjourned the eviction action until September 25, 2012, to allow 

plaintiff time to file an action in the Wayne County Circuit Court. 
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On September 17, 2012, plaintiff filed a complaint in Wayne County Circuit 

Court. In addition to money damages, plaintiff seeks to have the November 9, 

2011 Sheriff’s Sale set aside, the mortgage foreclosure declared void ab initio, 

and title quieted in her name. On October 23, 2012, defendants removed the case 

to federal court and later filed the instant motion to dismiss or for summary 

judgment. 

The district court granted defendants’ motion to dismiss or for summary judgment, and plaintiff 

now appeals. 

II.

We review de novo a district court’s order dismissing a claim under Rule 12(b)(6). 

Glazer v. Chase Home Fin. LLC, 704 F.3d 453, 457 (6th Cir. 2013). In doing so, we accept all 

well-pled factual allegations as true and determine whether they plausibly state a claim for relief. 

Roberts v. Hamer, 655 F.3d 578, 581 (6th Cir. 2011). “Threadbare recitals of the elements of a 

cause of action, supported by mere conclusory statements, do not suffice[,]” Ashcroft v. Iqbal,

556 U.S. 662, 678 (2009) (citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007)), and 

we “need not accept as true a legal conclusion couched as a factual allegation, or an unwarranted 

factual inference[.]” Handy–Clay v. City of Memphis, Tenn., 695 F.3d 531, 539 (6th Cir. 2012) 

(quotation marks and citation omitted). 

In addition, the district court’s grant of summary judgment is reviewed de novo. Geiger 

v. Tower Auto., 579 F.3d 614, 620 (6th Cir. 2009). Summary judgment is proper when, viewing 

the evidence in the light most favorable to the nonmoving party, there is no genuine dispute as to 

any material fact and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 

56(a); Burley v. Gagacki, 729 F.3d 610, 618 (6th Cir. 2013). 
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III.

Plaintiff raises two claims under Michigan law. Specifically, plaintiff argues (1) that 

Wells Fargo improperly used “robo-signers” when transferring title to the mortgage; and (2) that 

defendants violated Mich. Comp. Laws §§ 600.3205a-c,

1 which govern circumstances under 

which a mortgagor may request a meeting with the lender to attempt to resolve the foreclosure 

through mediation or a loan modification. For these reasons, plaintiff argues that the foreclosure 

sale should be set aside. We disagree. 

Under Michigan law, once the statutory redemption period expires, “all of [a] plaintiff’s 

rights in and title to the property [are] extinguished.” Bryan v. JPMorgan Chase Bank, 848 

N.W.2d 482, 485 (Mich. Ct. App. 2014) (citation omitted). Therefore, once the redemption 

period lapses, a former property owner may not assert any claims with respect to the property. 

See id. Indeed, “Michigan courts have held that once the statutory redemption period lapses, 

they can only entertain the setting aside of a foreclosure sale where the mortgagor has made ‘a 

clear showing of fraud, or irregularity.’” Conlin v. Mortg. Elec. Registration Sys., Inc., 714 F.3d 

355, 359 (6th Cir. 2013) (quoting Schulthies v. Baron, 167 N.W.2d 784, 785 (Mich. 1969)). 

Moreover, “not just any type of fraud will suffice.” Id. at 160. Rather, “the mortgagor’s claims 

of fraud, irregularity, accident, or mistake must relate to the sheriff’s sale itself, not to 

‘underlying equities, if any, bearing on the instrument . . . .’” Bank of N. Y. Mellon Trust Co. 

Nat’l Ass’n v. Robinson, No. 311724, 2013 WL 6690678 at *2 (Mich. Ct. App. Dec. 19, 2013)

(quoting Reid v. Rylander, 258 N.W. 630, 631 (Mich. 1935)). 

 

1We note that §§ 600.3205a-c were repealed, effective January 5, 2012. However, we 

will analyze plaintiff’s claims under this statute, as it was in effect at the time of the foreclosure.
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A mortgagor’s hurdles do not end there. Even if a mortgagor can show fraud or 

irregularity relating to the sheriff’s sale itself, courts may only set aside the foreclosure if the 

mortgagor shows that he or she was prejudiced by the fraud or irregularity. The Michigan 

Supreme Court, in Kim v. JPMorgan Chase Bank, N.A., 825 N.W.2d 329 (Mich. 2012), “made 

clear that failure to comply with the conditions set forth in Michigan’s foreclosure-byadvertisement statute does not render flawed foreclosures void (i.e., void ab initio) but merely 

voidable.” Conlin, 714 F.3d at 361 (citing Kim, 825 N.W.2d at 337). Under Kim, “to prove 

foreclosure-defect claims, ‘plaintiffs must show that they were prejudiced by defendant’s failure 

to comply with [Michigan statutes]. 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.’” Id. (quoting Kim, 825 N.W.2d at 337).2 

Regarding plaintiff’s claim that defendants used “robo-signers,” the district court 

properly ruled that “plaintiff neither alleges facts nor submits any proof to support her bald 

statement that Shelaya Glass and Mark Lee were robo-signers with no personal knowledge of the 

transaction.” Accordingly, plaintiff has failed to demonstrate fraud or irregularity sufficient to 

set aside the foreclosure sale. 

As for plaintiff’s claim that Wells Fargo violated Michigan’s loan modification statutes, 

we agree with the district court that this claim is meritless. Even assuming, arguendo, that 

 

2

Plaintiff’s reliance on this court’s decision in Mitan v. Federal Home Loan Mortgage

Corp., 703 F.3d 949 (6th Cir. 2012) is misplaced. Mitan relied on Davenport v. HSBC Bank, 

739 N.W.2d 383 (Mich. Ct. App. 2007). Davenport held that the failure of a mortgagee to 

comply with the requirements of Mich. Comp. Laws § 600.3201, et seq. rendered the foreclosure 

void ab initio. Id. at 384. Kim expressly abrogated Davenport’s rule, holding that a mortgagee’s 

failure to comply with the foreclosure statute rendered the foreclosure voidable. Kim, 

825 N.W.2d at 336. Mitan, therefore, was abrogated by Kim, a fact which this court has 

recognized. See Mourad v. Homeward Residential, Inc., 517 F. App’x 360, 367 (6th Cir. 2013). 

Contrary to plaintiff’s claims, Mitan and Kim are not reconcilable. 
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plaintiff could show that defendants failed to comply with § 3205c by failing to meet with 

plaintiff before beginning the foreclosure, plaintiff cannot show prejudice as a result of that 

noncompliance. Plaintiff does not identify any authority for the proposition that if a mortgagor 

qualifies for a loan modification, the lender is required to provide one. One statutory provision,

Mich. Comp. Laws § 600.3204(4)(f), prevents the initiation of a foreclosure proceeding where a 

modification has already been agreed to by the parties, but, perhaps obviously, nothing in the 

statute compels the parties to reach an agreement. In any case, the Michigan courts have already 

held that even if a mortgagor meets the eligibility criteria for a modification, the lender is not 

required to grant the modification. Brown v. Wachovia Mortg., No. 307344, 2013 WL 6083906, 

at *5 (Mich. Ct. App. Nov. 19, 2013). Moreover, Mich. Comp. Laws § 600.3205c(6) provides 

that if the modification statutes are complied with, and if the mortgagee is eligible for a 

modification, the foreclosure proceeding is not stopped, but merely converted from a foreclosure 

by advertisement into a judicial foreclosure. Accordingly, defendants’ compliance with the 

modification statutes would not have put plaintiff in a “better position to preserve [her] interest 

in the property absent [defendants’] noncompliance with the statute.” Kim, 825 N.W.2d at 337.

3

For these reasons, we affirm the district court’s ruling on plaintiff’s state law claims.

 

3

Plaintiff argues that the post-Kim case Sobh v. Bank of America, NA, No. 308441, 2013 

WL 2460022 (Mich. Ct. App. June 6, 2013) controls and requires that we remand here. We 

disagree. There, the court determined that the lender had breached Mich. Comp. Laws 

§ 600.3204(3), which requires that there be a “record chain of title . . . prior to the date of sale[,]” 

because interim assignments in the chain of title had never been recorded. Id. at *3. The court 

remanded for a determination whether this defect prejudiced the plaintiff. In other words, the 

prejudice determination in Sobh required further factfinding. By contrast, here, no further 

factfinding is required. This is because, even assuming that defendants failed to comply with the 

modification statutes, plaintiff would have at most received a judicial foreclosure, not an order to 

set aside the foreclosure.
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IV. 

Plaintiff also argues that the foreclosure violated the Due Process Clause of the Fifth 

Amendment. Constitutional claims require state action. Northrip v. Fed. Nat’l Mortg. Ass’n, 

527 F.2d 23, 25 (6th Cir. 1975). The dispositive issue in the present case is whether Fannie Mae 

is a state actor. If so, then the foreclosure was required to comply with constitutional due 

process. However, we hold that Fannie Mae is not a state actor. Accordingly, the foreclosure 

did not violate the Fifth Amendment. 

Fannie Mae and its companion, Freddie Mac, are Government-Sponsored Enterprises 

(“GSEs”) that purchase and securitize residential mortgages. In 2008, Congress passed the 

Housing and Economic Recovery Act (“HERA”). Pub. L. No. 110-289, 122 Stat. 2654 (codified 

at 12 U.S.C. § 4511). HERA, among other things, established the FHFA and by statute 

empowered it to take conservatorship of Fannie Mae and Freddie Mac. Plaintiff does not argue 

that before FHFA’s conservatorship, Fannie Mae was a private actor. Rather, plaintiff argues 

that FHFA’s conservatorship converted Fannie Mae from a private actor to a state actor. We 

disagree. 

Our existing precedent resolves this issue. In Mik v. Federal Home Loan Mortgage 

Corporation, 743 F.3d 149, 168 (6th Cir. 2014) (citing Lebron v. Nat’l R.R. Passenger Corp., 

513 U.S. 374 (1995)), we held as a matter of law that Freddie Mac is not a state actor. In so 

doing, we cited with approval and relied upon authority expressly rejecting arguments identical 

to plaintiff’s. Id. Plaintiff offers no reason to depart from Mik’s holding. Accordingly, we are 

bound by precedent to hold that Fannie Mae is not a state actor. We also note that every district 

court that has confronted the question has reached the same conclusion. See, e.g., Dias v. Fed. 

Nat’l Mortg. Ass’n, 990 F. Supp. 2d 1042, 1062 (D. Haw. 2013); Lopez v. Bank of America, 
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N.A., 920 F. Supp. 2d 798, 801 (W.D. Mich. 2013); Herron v. Fannie Mae, 857 F. Supp. 2d 87, 

95 (D.D.C. 2012). Additionally, although we acknowledge that state court decisions regarding 

federal constitutional issues are not binding on us, Commodities Exp. Co. v. Detroit Int’l Bridge 

Co., 695 F.3d 518, 528 (6th Cir. 2012), we also note that the highest Michigan state court to 

consider the issue has also concluded that the GSEs are not state actors. Fed. Home Loan Mortg. 

Ass’n v. Kelley, ___ N.W.2d ___, No. 315082 (Mich. Ct. App. Aug. 26, 2014). For these 

reasons, plaintiff’s claim that she was entitled to constitutional due process during her 

foreclosure proceeding fails as a matter of law. 

Moreover, we would reach this same conclusion even without reliance on Mik. Under 

Supreme Court precedent, a necessary condition precedent for a conclusion that a once-private 

entity is a state actor is that the government’s control over the entity is permanent. Lebron, 

513 U.S. at 399. Under HERA, Congress, by statute, empowered the FHFA to become 

conservator for Fannie Mae for the limited purpose of “reorganizing, rehabilitating, or winding 

up [its] affairs.” 12 U.S.C. § 4617(a)(2). This is an inherently temporary purpose. Accordingly, 

even if we had not previously decided Mik, we would reach the same conclusion: that following 

FHFA’s conservatorship, Fannie Mae is not a state actor. 

V.

Plaintiff also argues that the foreclosure violated the federal Home Affordable 

Modification Program (“HAMP”), and the Emergency Economic Stabilization Act (“EESA”), 

12 U.S.C. § 5201 et seq. We disagree. 

Defendants urge dismissal of these claims on the basis that neither HAMP nor the EESA 

provide for a private right of action. They are correct, but this fact is not dispositive in this case. 

Plaintiff correctly notes that she can still use “violations of [these statutes] to establish [her] state 
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law claims.” Mik, 743 F.3d at 167; see also id at 165–67 (holding that a plaintiff may use 

violations of federal law “‘offensively’ to establish a state law cause of action” even where the 

statute does not provide for a private right of action under federal law, and expressly rejecting an 

argument similar to defendants’). In short, plaintiff may raise HAMP and EESA violations as a 

defense to her foreclosure under state law. 

However, under Michigan law, plaintiff still must show prejudice arising from those 

violations, even assuming that she can show that the foreclosure violated HAMP and EESA. 

That is, plaintiff must still show that she “would have been in a better position to preserve [her]

interest in the property absent defendant’s noncompliance with” those statutes. Kim,

825 N.W.2d at 337. Plaintiff does not do so. Even assuming that defendants did in fact violate 

HAMP and EESA, plaintiff does not allege, nor present any evidence, that absent defendants’ 

noncompliance she would have been able to keep the property and avoid the foreclosure. Rather, 

plaintiff simply argues that there were HAMP and EESA violations and leaves the matter at that. 

But, as noted, this is insufficient under Michigan law. As this court has recognized, plaintiffs 

seeking to invalidate a foreclosure after the expiration of the redemption period must show 

“double liability” (i.e., a violation of the law and prejudice from that violation). Conlin, 

714 F.3d at 362. Plaintiff has not done so. Therefore, the district court did not err by dismissing 

plaintiff’s claims as to HAMP and EESA violations. 

VI.

Finally, plaintiff challenges the district court’s dismissal of her claim that her failure to 

receive a loan modification violated the nondiscrimination requirements of the Fair Housing Act 

(“FHA”). Again, we agree with the district court’s dismissal. 
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To state a claim for relief under [the FHA], . . . plaintiff[] must plead that (1) [she 

was] a member of a protected class; (2) [she] attempted to engage in a “real 

estate-related transaction” with [defendants] and met all relevant qualifications for 

doing so; (3) [defendants] refused to transact business with [plaintiff] despite 

[her] qualifications; and (4) [defendants] continued to engage in that type of 

transaction with other parties with similar qualifications.

Mich. Prot. & Advocacy Serv., Inc. v. Babin, 18 F.3d 337, 346 (6th Cir. 1994). 

Here, plaintiff’s FHA claims fail because plaintiff failed to allege facts or submit 

evidence that she was qualified for a loan modification. As the district court recognized, this is 

an “essential element of her [FHA] claim.” Plaintiff’s argument on appeal is that she has 

pleaded facts relating to her race, but this is not the basis on which the district court dismissed 

her claim. The fact remains that she has not shown she was qualified for a loan modification. 

Nor has plaintiff alleged that defendants offered modifications to those outside of the protected 

class while denying them to her, another essential element of her claim. 

Plaintiff opines in a general sense that FHA claims are “not subject to a special or 

heightened pleading standard.” However, this court has held that although Rule 12 embodies a 

“liberal pleading standard, it requires more than the bare assertion of legal conclusions. Rather, 

the complaint must contain either direct or inferential allegations respecting all the material 

elements to sustain a recovery under some viable legal theory.” Nat’l Hockey League Players 

Ass’n v. Plymouth Whalers Hockey Club, 419 F.3d 462, 468 (6th Cir. 2005). Accordingly, 

requiring plaintiff to allege all essential elements of her claim is not akin to subjecting her to a 

heightened pleading standard. The district court did not err in dismissing plaintiff’s FHA claim.

VII.

For these reasons, we affirm the judgment of the district court.