Court Opinion

ID: 3168436
Source: CourtListenerOpinion
Date Created: 2016-01-11 08:06:44.758282+00
Date Added: 2024-06-11T11:58:22.757913
License: Public Domain

STATE OF MICHIGAN

                           COURT OF APPEALS

JP MORGAN CHASE NATIONAL                                           UNPUBLISHED
ASSOCIATION,                                                       January 7, 2016

              Plaintiff-Appellee,

v                                                                  No. 322718
                                                                   Macomb Circuit Court
MICHAEL R. TEANY a/k/a MICHAEL TEANY,                              LC No. 2013-002063-CH

              Defendant-Appellant.

Before: SHAPIRO, P.J., and O’CONNELL and GLEICHER, JJ.

PER CURIAM.

        Defendant appeals as of right the trial court’s order granting plaintiff’s motion for
summary disposition and entering a judgment for a judicial foreclosure in plaintiff’s favor. We
affirm for the reasons stated in this opinion.

       On January 4, 2008, defendant obtained a $151,453 mortgage loan from Ross Mortgage
Corporation to purchase real property located at 26688 Richard Drive, Warren, Michigan. A
promissory note was executed between Ross Mortgage Corporation and defendant. As security
for the promissory note, defendants granted a mortgage to Mortgage Electronic Registration
Systems, Inc. (MERS). MERS assigned the mortgage to Chase Home Finance, LLC. Plaintiff is
the successor by merger to Chase Home Finance, LLC.

        Defendant defaulted on the promissory note and mortgage. In April 2012, plaintiff began
the process of foreclosure by advertisement. Under MCL 600.3204(4),1 a foreclosure by
advertisement could not proceed until completion of a multi-step loan modification process.2

1
  MCL 600.3204 was amended by 2014 PA 125. In relevant part, the amended statute deleted
subsection 4 from the statute. All references in this opinion to MCL 600.3204(4) are to the
former version of MCL 600.3204.
2
  MCL 600.3205c(1) required the lender to “work with the borrower to determine whether the
borrower qualifies for a loan modification.” MCL 600.3205c(1). It also provided that, even if a
borrower was eligible for a modification, the lender could still proceed with a foreclosure under
certain circumstances. MCL 600.3205c(7). MCL 600.3205c was repealed effective June 30,

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That process began with a notice to the defaulting party. See MCL 600.3204(4)(a). Consistent
with that requirement, defendant was sent a letter on April 20, 2012 informing him about the
possibility of a loan modification and the relevant requirements. According to defendant, he
timely submitted all the requested documents in order to continue with the process. However,
rather than proceeding to determine whether defendant was eligible for a loan modification, as
provided for in MCL 600.3204(4), a month later, plaintiff abandoned the foreclosure by
advertisement and initiated a judicial foreclosure. See MCL 600.3101 et seq. Eleven months
later, plaintiff filed a motion for summary disposition pursuant to MCR 2.116(C)(9) (failure to
state valid defense) and MCR 2.116(C)(10) (no genuine issue of material fact). Summary
disposition was granted.

        As he did below, defendant argues on appeal that once plaintiff started the loan
modification process it was barred from completing either a foreclosure by advertisement or a
judicial foreclosure until it completed that process as defined by MCL 600.3204(4). We disagree
because the requirement of a loan modification process only applies to foreclosure by
advertisement.

       MCL 600.3204 plainly addresses only foreclosures by advertisement. Indeed, prior to its
amendment in 2014, its first sentence read: “(1) Subject to subsection (4) [the section requiring
the modification process], a party may foreclose a mortgage by advertisement . . . .” (emphasis
added). The mandatory loan modification process did not apply to judicial foreclosures, which
operated under the supervision and timetable of the court. See generally MCL 600.3101 et seq.

        Nor is there language in the relevant statutes stating that after a lender initiates the
foreclosure by advertisement process it is thereafter prohibited from abandoning that process in
order to initiate a judicial foreclosure. In fact, obtaining a judicial foreclosure was the sole
remedy available to a borrower where a lender failed to comply with the modification process.
MCL 600.3205c(8). Further, pursuant to the foreclosure by advertisement statute, even if the
loan modification process was completed and it was determined that the borrower was eligible
for a modification, under certain circumstances, the lender could still initiate a foreclosure rather
than agreeing to a modification. MCL 600.3205c(7). Finally, nothing in the statutory provisions
pertaining to judicial foreclosure, MCL 600.3101 et seq., preclude a judicial foreclosure in the
event that the lender previously pursued and then abandoned an effort to procure a foreclosure by
advertisement.

          Defendant does not identify any other alleged defects in the judicial foreclosure, so we
affirm.

                                                              /s/ Douglas B. Shapiro
                                                              /s/ Peter D. O’Connell
                                                              /s/ Elizabeth L. Gleicher

2014. See 2014 PA 125. All references to MCL 600.3205c in this opinion are to the repealed
statute.

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