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Rountree v. Nationstar Mortgage, LLC

United States District Court, E.D. Michigan, Southern Division

August 21, 2017

LIN ROUNTREE, Plaintiff,
v.
NATIONSTAR MORTGAGE, LLC and FEDERAL NATIONAL MORTGAGE ASSOCIATION, Defendants.

          OPINION AND ORDER GRANTING PLAINTIFF'S MOTION FOR TEMPORARY RESTRAINING ORDER [11]

          HONORABLE STEPHEN J. MURPHY, III

         Plaintiffs filed an eight-count complaint in Oakland County Circuit Court concerning the title to a property in Farmington Hills and related loan agreements. Defendants timely removed the action but have not yet responded to it. Now before the Court is Plaintiff's motion for a temporary restraining order (TRO). The redemption period will expire today, so Plaintiff asks the Court to enter a TRO tolling the period's expiration. The Court will grant the motion.

         BACKGROUND

         The general timeline of events leading up to this case is fairly straightforward.[1] Plaintiff purchased a home in Farmington Hills in 2006 and obtained a warranty deed and a mortgage on the home-a mortgage now assigned to Defendant Nationstar. Nine years later, in October 2015, Plaintiff submitted an application for a loan modification agreement to Nationstar. But there was apparently a "glitch" in Nationstar's system, so it told Plaintiff to submit updated financial information. This began a 15-month cycle of Plaintiff submitting requested information and new applications, followed by Nationstar insisting that more information or new applications were necessary. Nationstar finally foreclosed on Plaintiff's home in January 2017 and Defendant Fannie Mae purchased the home at a sheriff's sale the next month. The redemption period ends on August 21, 2017.

         STANDARD OF REVIEW

         Federal Rule of Civil Procedure 65 allows a court to issue a preliminary injunction or TRO. Fed.R.Civ.P. 65. Although a court has the ability to issue a preliminary injunction, it is considered "an extraordinary remedy which should be granted only if the movant carries his or her burden of proving that the circumstances clearly demand it." Overstreet v. Lexington-Fayette Urban Cty. Gov't, 305 F.3d 566, 573 (6th Cir. 2002). When reviewing a motion for a preliminary injunction, [2] the Court must consider four factors:

(1) whether the plaintiff has a strong likelihood of succeeding on the merits;
(2) whether the plaintiff will suffer irreparable injury absent the injunction;
(3) whether issuing the injunction will cause substantial harm to others; and
(4) whether the public interest will be furthered by the issuance of the injunction.

Gonzales v. Nat'l Bd. of Med. Examiners, 225 F.3d 620, 625 (6th Cir. 2000). Although the "failure to show a likelihood of success on the merits is generally fatal, " Powers v. Bank of Am., N.A., 63 F.Supp.3d 747, 751 (E.D. Mich. 2014) (citing Overstreet, 305 F.3d at 573), "no single factor will be determinative"-the Court balances all four. Michigan Bell Tel. Co. v. Engler, 257 F.3d 587, 592 (6th Cir. 2001).

         DISCUSSION

         Under Michigan law, a mortgagor has six months to redeem his property after a sheriff's sale. Mich. Comp. Laws § 600.3240(8). "Once this statutory redemption period lapses, however, the mortgagor's 'right, title, and interest in and to the property' are extinguished." Conlin v. Mortg. Elec. Registration Sys., Inc., 714 F.3d 355, 359 (6th Cir. 2013) (quoting Piotrowski v. State Land Office Bd., 302 Mich. 179, 187 (1942) and citing Mich. Comp. Laws § 600.3236). And once the period has expired, the door to redemption is firmly closed: courts may set aside the foreclosure only upon a clear showing of fraud or irregularity in the foreclosure procedure itself. Id. at 359-60.

         Because the expiration of the foreclosure period has so preclusive an effect, trial courts can and do issue TROs which toll the redemption period. See, e.g., Wells Fargo Bank, NA v. SBC IV REO, LLC, 318 Mich.App. 72, 87-88 (2016); Hodge v. Ulmer, No. 194439, 1997 WL 33343877, at *1 (Mich. Ct. App. Oct. 31, 1997); see also Whitehead v. Fed. Nat. Mortg. Ass'n, No. 12-CV-13840, 2013 WL 5353050, at *5 (E.D. Mich. Sept. 24, 2013) (recognizing the necessity of a post-removal TRO to avoid the preclusive effect of the redemption period's expiration). Unlike the high bar applicable to post-expiration relief, a pre-expiration TRO may be entered for claims unrelated to the foreclosure proceeding itself. See, e.g., ...


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