United States District Court, E.D. Michigan, Southern Division
OPINION AND ORDER DENYING PLAINTIFF'S MOTION TO
AMEND COMPLAINT  AND GRANTING DEFENDANT'S MOTION TO
STEPHEN J. MURPHY, III, United States District Judge
Sybil Julien filed the instant foreclosure-related action in
a Michigan Circuit Court. Defendant Nationstar Mortgage then
removed the case and filed a motion to dismiss. ECF 5.
Plaintiff failed to timely respond, but eventually filed a
motion to amend the complaint. ECF 7. The Court has reviewed
the briefs and finds that oral argument is unnecessary.
See E.D. Mich. LR 7.1(f)(2). For the reasons below,
the Court will deny the motion to amend and grant the motion
October 26, 2007, Julien received a "reverse
mortgage"-a lending method for older homeowners-for 4912
Blue Water Drive in Otter Lake, Michigan. Reverse mortgagors
must pay property taxes, but are not required to make monthly
mortgage payments; their payments are deferred until their
death or when they move from or sell their home. See
ECF 5, PgID 36 n.1. Julien actually received two mortgages on
the same day, and the senior mortgage was eventually assigned
to Nationstar on May 11, 2015.
secure the mortgages, Julien signed a "Truth in
Lending" statement. ECF 5-8.The statement lists several
events that, if they were to occur, would allow the
mortgagees to require the full and immediate payment of the
loan. Id. One triggering event was if the property
was no longer the "principal residence" of at least
one borrower. Id. Another was if the borrower
"violates any other covenants of the Security
Instruments and has refused or is unable to comply with the
violated conditions of the Security Instruments."
point, Nationstar determined that Julien was no longer
occupying the mortgaged home as her primary residence. So the
lender sent letters to the home on February 24, 2015, April
1, 2015, May 13, 2015, and August 24, 2015. ECF 5-9, 5-10,
5-11, 5-12. The letters informed Julien that she was
"technically in default due to the non-occupancy of the
property as the principal residence" ECF 5-9, PgID 100;
ECF 5-10, PgID 105, that she faced foreclosure, ECF 5-11,
PgID 111; and the letters further gave her detailed
instructions on what to do.
did not timely respond to the letters, so Nationstar
foreclosed on the home and allegedly published and posted
notices of foreclosure in compliance with Michigan law. ECF
5, PgID 43. Nationstar subsequently purchased the home at a
sheriff's sale on February 10, 2016. The redemption
period commenced, though the parties dispute whether it was a
six-month or twelve-month period. In any event, Julien did
not redeem the property, but filed the instant lawsuit on
September 28, 2016.
law provides a period of redemption for a mortgagor to redeem
property after a sheriff's sale. Mich. Comp. Laws §
600.3240. The type of property and the amount claimed to be
due affect whether the period is six or twelve months.
Id. No matter the length, however, once the
statutory redemption period lapses "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). After the period expires, courts may set aside the
foreclosure only upon a clear showing of fraud or
irregularity in the foreclosure procedure itself.
Id. at 359-60.
default, the redemption period is one year, but "if the
amount claimed to be due on the mortgage at the date of the
notice of foreclosure is more than 66-2/3% of the original
indebtedness secured by the mortgage, the redemption period
is 6 months." Mich. Comp. Laws § 600.3240(8), (12).
Julien argues that the exception does not apply because her
original indebtedness was $285, 000 and the amount claimed to
be due at the date of the notice was $138, 578.54-a ratio of
48.6%. Her calculations are not quite accurate, however,
because Julien had a reverse mortgage, and her indebtedness
increased with time, rather than decreased. Nationstar
alleges that Julien's initial indebtedness was $74, 225
and that it grew when she made subsequent draws. There is no
evidence in the record of the exact figure,  but whatever the
starting amount, Julien's ratio of amount-due to
original-indebtedness would not sink below the 66-2/3%
threshold because her indebtedness only grew; it did not
shrink. The six-month redemption period therefore applied.
did not redeem the property prior to the redemption
period's expiration-even if the longer period had
applied. She filed her lawsuit on September 28, 2016, but the
filing of a lawsuit does not toll the redemption period.
Overton v. Mortg. Elec. Registration Sys., No.
284950, 2009 WL 1507342, at *1 (Mich. Ct. App. May 28, 2009).
In any event, the redemption period has expired. And once the
redemption period expires, "all of plaintiff's
rights in and title to the property [are] extinguished."
Id. (citing Piotrowski v. State Land Office
Bd., 302 Mich. 179, 187 (1942) and Mich. Comp. Laws
§ 600.3236). Julien therefore lacks standing to
challenge the foreclosure. Bryan v. JPMorgan Chase
Bank, 304 Mich.App. 708, 715 (2014).
moved to dismiss based on the period's expiration and
Julien failed to respond to the motion, but she did
eventually move to amend her complaint. Ignoring, for a
moment, the procedural improprieties that Nationstar has
accurately identified, see ECF 8, PgID 159-62,
granting leave to amend would be improper. Leave to amend
"should not be granted if the amended complaint could
not withstand a motion to dismiss[.]" Fisher v.
Roberts, 125 F.3d 974, 978 (6th Cir. 1997). And because
the redemption period has expired, Julien has not identified
any theory on which an amended complaint would survive a
motion to dismiss.
the redemption period expired, Julien has limited options. To
set aside the foreclosure, she must allege facts ...