Here in California, we primarily use non-judicial foreclosures in which the borrower is sent a foreclosure notice through the mail. Many other states use non-judicial foreclosures, but Michigan is one of the few states to use a process called "foreclosure by advertisement," in which the borrower receives notice through local newspaper advertisements as well as by a notice posted at the property. So Vincent Howard and our Riverside foreclosure defense attorneys were interested to see a case involving foreclosure by advertisement against someone who alleged the process was followed incorrectly. In Mitan v. Fed. Home Loan Mortgage Corp., the Sixth U.S. Circuit Court of Appeals agreed with pro se plaintiff Keith Mitan that his claims should be examined more closely rather than dismissed on summary judgment.
Mitan is the executor of the estate of Frank Mitan, whose home was foreclosed. Freddie Mac bought the home at foreclosure auction in February of 2010, and Michigan's statutory redemption period--during which the estate could reclaim the home by paying the mortgage--expired six months later. Two weeks before that period ended, Mitan sued Freddie Mac, saying the foreclosure was void because it was not conducted according to Michigan law. The case was removed to federal court, which did not extend the deadline. However, the estate argued that the deadline was void because the entire foreclosure was void. In federal court, the judge dismissed the case on summary judgment, finding that the estate had no rights after the redemption period had ended. After a denial of his motion for a rehearing, Mitan appealed.
The Sixth Circuit reversed and remanded, finding that the issue was inappropriate for summary judgment because Mitan had raised genuine issues of material fact about the legality of the foreclosure. When a lender forecloses by advertisement in Michigan, it must provide the borrower notice saying who to contact about a loan modification. It also lays out the procedure for a loan modification, and forbids foreclosure by advertisement if the parties agree to a loan modification or the lender fails to negotiate. The record shows that Frank Mitan before his death, had requested negotiations, but the parties disagree on whether Mitan independently came to an agreement with Wells Fargo. If he did, the estate's could have standing because the foreclosure may be void. The district court never performed a review of these facts because of a clerical error, the Sixth said, but such a structural defect would remove the right to foreclose. To establish this fact, the court remanded the case.
Vincent Howard and our Newport Beach foreclosure defense lawyers are pleased to see that Michigan has such pro-consumer laws. We suspect that this law was enacted recently, to combat the trend toward "dual-track foreclosures," in which one arm of the lender is foreclosing while another is negotiating a loan modification with the borrower. As a result of this practice, many people across the country who thought they had loan workouts--even people who'd already signed agreements and started payments--had unpleasant surprise foreclosures. Foreclosures have died down (though by no means stopped), but at Howard Law, P.C., our San Bernardino foreclosure defense attorneys hope laws like this continue to help people who are struggling to get a workable loan modification.
If you're in default and your lender or loan servicer has been less than helpful, you should call Vincent Howard and the team at Howard Law to discuss your legal options. You can send us a message online or call 1-800-872-5925.