Veasley v. Federal National Mortgage Ass'n

48 F. Supp. 3d 1008, 2014 U.S. Dist. LEXIS 135908, 2014 WL 4792073
CourtDistrict Court, E.D. Michigan
DecidedSeptember 26, 2014
DocketNo. 2:12-cv-13642
StatusPublished
Cited by2 cases

This text of 48 F. Supp. 3d 1008 (Veasley v. Federal National Mortgage Ass'n) is published on Counsel Stack Legal Research, covering District Court, E.D. Michigan primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Veasley v. Federal National Mortgage Ass'n, 48 F. Supp. 3d 1008, 2014 U.S. Dist. LEXIS 135908, 2014 WL 4792073 (E.D. Mich. 2014).

Opinion

OPINION AND ORDER GRANTING DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT

GERALD E. ROSEN, Chief Judge.

I. INTRODUCTION

Plaintiff Theola Veasley commenced this suit in Oakland County Circuit Court in July of 2012, asserting a claim against Defendants Federal National Mortgage Association (“Fannie Mae”) and BAC Home Loans Servicing, LP (“BAC”) arising from the foreclosure sale of her home in Southfield, Michigan. Plaintiff claims that Defendants initiated the foreclosure sale without proper chain of title due to a clerical error in the transfer of the mortgage from a prior mortgage holder to BAC, in violation of M.C.L. § 600.3244. Defendants removed the case to this Court on August 16, 2012, and the parties have now filed cross-motions for summary judgment. Defendants argue that (1) Plaintiffs’ claims are barred by res judicata because a Michigan state court already ruled that the foreclosure was valid and issued a Judgment of Possession to Defendant Fannie Mae, the purchaser of the home at the sheriffs sale; and (2) the clerical error in the mortgage transfer did not invalidate the mortgage. Plaintiff opposes these two points in her own motion for summary judgment. The Court also issued an order directing the parties to file supplemental briefing as to whether the Court has jurisdiction under the Rooker-Feldman doctrine, and the parties have done so, both arguing that this Court has jurisdiction.

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 decide the parties’ motions “on the briefs.” See L.R. 7.1(f)(2). This Opinion and Order sets forth the Court’s ruling.

II. PERTINENT FACTS

The facts are mostly undisputed and relatively straightforward. On August 31, 2004, Plaintiff Theola Veasley attempted to close on the purchase of a home at 24669 Lafayette Circle, Southfield, Michigan (“24669 Lafayette”) from non-party Royse Development. Pl.’s Compl. ¶ 8, Dkt. # 1. At the closing, however, Royse conveyed [1010]*1010to Plaintiff a warranty deed to a different property: 24654 Lafayette Circle, South-field Michigan (“24654 Lafayette”). Def.’s Mot. for Summ. J., Ex. A, Dkt. # 15-2. The warranty deed contained a metes-and-bounds description of 24654 Lafayette, and described those metes-and-bounds as “[m]ore commonly known as: 24654 Lafayette Circle.” Id. Plaintiff financed her intended purchase of 24669 Lafayette through a $249,000 loan from Countrywide Home Loans, secured by a mortgage executed by Plaintiff and granted to non-party Mortgage Electronic Registration Systems, Inc. (the “Mortgage”). Id. at Ex. BC, Dkt. # 15-3, 15-4. The Mortgage granted a security interest in 24654 Lafayette, the property for which Plaintiff had incorrectly been given a deed.

The mistake in the deed was quickly discovered. In December 2004, Plaintiff conveyed 24654 Lafayette to its intended owner, Anthony Rhine, and Rhine conveyed 24669 Lafayette to Plaintiff. Id. at Ex. D-E, Dkt. # 15-5, 15-6. Both deeds contained the correct metes-and-bounds descriptions of the properties as well as the correct descriptive addresses. Id. On October 21, 2005, Plaintiff and Mortgage Electronic Registration Systems executed a modification “to correct the legal description” of the Mortgage and bring it into line with the corrected deed. Id. at Ex. F, Dkt. # 15-7. The modification contained the correct metes-and-bounds description of 24669 Lafayette and the correct descriptive address. Id. On the same day, Mortgage Electronic Registration Systems granted Plaintiff a partial release of the Mortgage only as to the 24654 Lafayette property. Id. at Ex. G, Dkt. # 15-8.

Nearly five years later, on August 30, 2010, Mortgage Electronic Registration Systems assigned the Mortgage to Defendant BAC. Id. at Ex. H, Dkt. # 15-9. The assignment specifically stated that it transferred interest in “a certain real estate mortgage dated August 31, 2004, made by Theola Veasley ... to Mortgage Electronic Registration Systems, Inc.” and referenced the Mortgage’s original county liber number. Id. The assignment provided the correct address of Plaintiffs property, 24669 Lafayette, but, like the original mortgage, incorrectly contained the metes- and-bounds description of the 24654 Lafayette property. Id.

The error apparently went unnoticed until the foreclosure proceedings leading to this case. At some point in 2010, Plaintiff defaulted on the Mortgage. Pl.’s Compl. ¶ 15, Dkt. # 1. BAC subsequently initiated foreclosure proceedings and published notices of foreclosure. Def.’s Mot. for Summ. J., Ex. I, Dkt. # 15-10. On February 22, 2011, a sheriffs sale was held for the 24669 Lafayette property, and Defendant Fannie Mae purchased the property for $68,000. Id. All foreclosure notices and the sheriffs deed produced at the sale provided the correct metes-and-bounds description and correct address of 24669 Lafayette. Id.

In accordance with Michigan law, the sale was only to become operative at the expiration of a redemption period, allowing Plaintiff the opportunity to reclaim the home by paying the amount bid at the sheriffs sale, plus interest and fees. See M.C.L. § 600.3244. The redemption period was set to expire on August 22, 2011. Def.’s Mot. for Summ. J., Ex. I, Dkt. # 15-10. On July 29, 2011, Plaintiff retained the services of non-party Dynamic Housing Solutions (“DHS”) to facilitate the redemption.1 PL’s Mot. for Summ. J., Dkt. [1011]*1011# 17, at 5. On August 17, Plaintiff received a written calculation of the redemption amount, and on the same day, Dynamic Housing Solutions mailed a letter “requesting a 4 day written redemption extension to allow time” for the funds, which were “sitting in a retirement account” to be transferred. Id. at Ex. I-J.2 This extension was never approved, and Plaintiff did not make any payment by the expiration of the redemption period on August 22, resulting in Fannie Mae taking title to 24669 Lafayette.

On April 9, 2012, Fannie Mae brought an action in Michigan’s 46th District Court, seeking to recover possession of 24669 Lafayette (Case No. LT12-1800).3 The court held a hearing on April 24, 2012, and on June 14, 2012, in a summary proceeding, it issued a Judgment of Possession to Fannie Mae. Id. at Ex. L. There is no record of the issues discussed at the hearing — the Judgment was issued without any accompanying opinion. An order for eviction was subsequently entered on July 25, 2012.

Plaintiff did not appeal that Judgment, instead filing the instant action on July 13, 2012, in Oakland County Circuit Court, asserting a single claim: that Defendants did not comply with M.C.L. § 600.3204, which requires that “a record chain of title must exist before the date of sale” by the party foreclosing the mortgage. Pl.’s Compl., Dkt. #1, at ¶ 26. Plaintiff requested that the court (1) set aside the foreclosure sale and resulting sheriffs deed and (2) enjoin eviction proceedings. Pl.’s Compl., Dkt. # 1. Id. Defendants subsequently removed the action to this Court on August 16, 2012, Def.’s Removal, Dkt.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Cite This Page — Counsel Stack

Bluebook (online)
48 F. Supp. 3d 1008, 2014 U.S. Dist. LEXIS 135908, 2014 WL 4792073, Counsel Stack Legal Research, https://law.counselstack.com/opinion/veasley-v-federal-national-mortgage-assn-mied-2014.