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A Better Partnership
August 28, 2014

COA vacates its earlier holding that voluntary mergers must be recorded in the chain of title to comply with the foreclosure by advertisement statute

In Federal Home Loan Mortgage Association v. Kelley, No. 315082, the Court of Appeals vacated its June 24, 2014 opinion and on reconsideration issued a new opinion that reached the same result but without holding that CitiMortgage, Freddie Mac's predecessor in interest, had violated the foreclosure-by-advertisement statute.  That initial holding relied in part on a theory that the property does not succeed in a merger "by operation of law."  The court eliminated that part of its opinion, and its merger property-succession theory, concluding that it need not address the validity of a foreclosure sale under the recording act where defendants failed to show prejudice.  As such, the Court reversed the circuit court’s order and remanded for reinstatement of the district court’s order terminating defendants’ possession of the residential property foreclosed upon.  Click here to see our prior blog post on the initial opinion.

Disclaimer:  Warner Norcross & Judd filed an amicus brief for the Michigan Bankers Association on reconsideration, requesting the relief granted in this recent order.

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