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### STATE OF MICHIGAN

COURT OF APPEALS

CLARA CARTER,

Plaintiff-Appellant, UNPUBLISHED March 26, 2015

v No. 318622 Wayne Circuit Court BAC HOME LOANS SERVICING LP and FEDERAL NATIONAL MORTGAGE ASSOCIATION, a/k/a FANNIE MAE, LC No. 12-009051-CH

Defendants-Appellees.

Before: C AVANAGH , P.J., and M ETER and S HAPIRO , JJ.

S HAPIRO , J. ( dissenting ).

I respectfully dissent as I beli eve there is a question of fac t, sufficient to survive summary disposition, as to whether there was an irregularity in the for eclosure process sufficient to allow an equitable extension of the redemption period.

In 2001, plaintiff borrowed $30,000 from First Class Financial Corporation and provided a mortgage to it as security. The loan and mortgage were later assigned to Bank of America (BOA). From the record, it appears that plaintiff complied wit h all provisions of the mortgage until May 2010 and that, during those nine years, she had, in a ddition to paying 7.625% interest, reduced the principal of the loan to $21,437.57.

Maintenance of homeowner’s insurance was required under the mo rtgage. On May 30, 2010, BOA sent plaintiff a letter indicating that it had learne d that the insurance policy had expired on May 14, 2010 and advising plaintiff that she must pr ovide proof of continued insurance.

On June 13, 2010, BOA sent plaintiff a letter stating that it had not yet received proof of insurance and that, as a result, it would purchase insurance co verage for the period of May 14, 2010 to May 14, 2011 unless plainti ff provided proof of insuran ce within 35 days. It advised that the cost of such coverage w ould be charged to plaintiff’s escrow account and “your monthly payment will be adjusted accordingly.”

On July 21, 2010, BOA sent plaintiff a letter stating that it had purchased homeowners insurance on the property in a coverage amount of $225,000, at a cost of $3,417. The letter further advised that if plaintiff’s loan amount was less than t hat coverage amount (which it was),-2- plaintiff could return the form, with a signature, to reduce BO A’s purchase of coverage to an amount equal to the amount of the loan and noted that such a re duction would not provide coverage on her equity. Plaintiff did not submit the offered f orm. The letter also stated that BOA would cancel the insurance it purchased as of the effective date of a policy purchased by plaintiff. It also provided that the costs of the policy would be billed to plaintiff’s escrow
account.

On December 17, 2010, BOA sent plaintiff a “Notice of Intent t o Accelerate.” It stated that the amount in arrears was $611.66, which appears to reflec t the additional monthly escrow charge for the insurance and a l ate fee. It advised that in or der to cure the default, plaintiff would have to pay the amount in arre ars by January 16, 2011, or the l oan would be accelerated.

On January 18, 2011, plaintiff fa xed BOA proof that she had pu rchased a year’s policy of homeowner’s insurance on the house, effective August 31, 2010.

On January 27, 2011, a professional corporation named Trott & Trott sent a letter on its letterhead to plaintiff indicati ng that “it represents BAC Home Loans Servicing [(BAC)]” and stating that plaintiff’s “creditor” had “elected to accelerate the total indebtedness” which totaled $24,295.41 (which included the full amount of the insurance pre mium paid by BOA). BOA was not mentioned by name in the T rott & Trot t letter.

On January, 29, 2011, a notice of s ale was posted on plaintiff ’s property, setting March 2, 2011 as the date of sale. This notice was also published in th e newspaper on January 28, February 4, February 11, and February 18, 2011.

As evidenced by an Affidavit of Auctioneer, the property was s old on March 2, 2011 to BAC for $1,800 and advising that rede mption was available for s ix months.

The record contains no evidence of subsequent communications t o plaintiff from either BAC or Trott & Trott.

On March 21, 2011, however, a letter was sent to plaintiff on Bank of America letterhead stating that it had received pla intiff’s proof of insurance (th at plaintiff had provided two months earlier) and that, as a result, “the Lender-Placed Hazard Insur ance on your loan for the term 5/14/2010 through 5/14/2011 has been flat cancelled. A partial refund in the amount of $1,020 will post to your loan. This is in addition to a partial refun d in the amount of $2,397.00 which also posted to your loan.” Under a heading entitled “ WHAT THIS MEANS ,” the letter stated in full: “We apologize for any inconvenience that you may have experienced.” The letter further stated, “You are a valued customer here at BAC Home Loans Servi cing, LP.” The letter made no reference to the foreclosure or sheriff’s sale, nor that it was BOA’s position that plaintiff no longer owned the property.

The redemption period expired on September 2, 2011.

At some point thereafter, BAC brought an eviction action in di strict court and plaintiff, in turn, filed the instant case in circuit court challenging the f oreclosure. BAC brought a motion to dismiss on the grounds that since the redemption period had exp ired, plaintiff lacked standing to bring suit. Plaintiff argued that the proofs would show that p laintiff had in fact always-3- maintained homeowner’s insurance and that she “steadfastly cont acted the bank” but that “the bank is impossible to deal with . . . [that the bank engaged in ] an ongoing failure to accept the documentation from my client or the phone calls from my clients stating that we have insurance.” Her counsel advised the court that plaintiff had c ontinued to make escrow payments up through the date of the hearing. At the hearing, the trial court indicated her displeasure with the situation, stating “the whole thing stinks,” but noted that the period for redemption had passed. She indicated that she w ould issue a written opinion.

That opinion was issued on Sept ember 4, 2013. It stated that “there is a question of fact regarding whether or not the lender actually received proof tha t Plaintiff obtained homeowners’ insurance. . . . Nevertheless, summary disposition is granted . . . because the redemption period has long since expired and title has vested in the purchaser BA C Home Loans.” The court went on to state that “there is no ev idence of fraud or irregularity in the foreclosure proceedings that would compel this court to s et aside the foreclosure.”

I would reverse summary disposition and remand for an evidenti ary hearing to determine whether there was an irregularity sufficient to equitably exten d the redemption period. 1 After the sheriff’s sale, plaintiff received the March 21, 2011 letter fr om BOA, a reasonable reading of which could lead a homeowner to believe that the proofs she sub mitted had resolved the issue, that no further monies were presently due, and that she still o wned her home. This letter came from BOA, the actual creditor. 2
It is impossible to know from the record before us whether the re were other communications in which this view was further emphasized or if, to the contrary, plaintiff did understand that her home had been sold and that the redemption period continued to run. After hearing the relevant evidence, the trial court should determine whether a reasonable borrower could have concluded that she retained ownership of her home an d did not need to redeem it. If so, the case should be reinstated.

Accordingly, I res pectfully dissent.

/s/ Douglas B. Shapiro

1 A redemption period may be equitably extended in cases involvi ng a clear showing of fraud or irregularity. See, e.g., Senters v. Ottawa Savings Bank, FSB, 443 Mich 45, 56-57; 503 NW2d 639 (1993); Schulthies v Barron, 16 Mich App 246, 247-248; 167 NW2d 784 (1969).

2 It seems that BOA, BAC, and Trott & Trott were each communicat ing with plaintiff without copying each other despite the fact that they would appear to h ave had a unity of interest regarding plaintiff. At least, there is no “cc:” on any of the ir letters to indicate that they were copying each other. The reason for this failure to speak with a single voice is not apparent and would appear to be simply a matter of convenience for their off ices. I do not think it unreasonable, based on this record, for plaintiff to have concl uded that the communications from BOA, i.e., the actual cred itor, were controlling.