United States District Court, E.D. Michigan, Southern Division
OPINION AND ORDER DENYING DEFENDANTS' MOTION TO
DISMISS AND NOTICE OF SETTLEMENT CONFERENCE
BERNARD A. FRIEDMAN SENIOR UNITED STATES DISTRICT JUDGE
matter is presently before the Court on defendants'
motion to dismiss [docket entry 10]. Plaintiffs have filed a
response in opposition and defendants have filed a reply.
Pursuant to E.D. Mich. LR 7.1(f)(2), the Court shall decide
this motion without a hearing.
a breach of contract and wrongful foreclosure action.
Plaintiffs, a married couple, allege that defendants, their
mortgagee and loan servicer, failed to provide them with
proper notice of foreclosure-by-advertisement proceedings,
thereby breaching the terms of plaintiffs' mortgage and
loan agreement, and “whipsawed” plaintiffs by
offering loan modification agreements and, at the same time
but without plaintiffs' knowledge, foreclosing.
Plaintiffs seek damages, costs, attorney fees, and equitable
documents attached to the parties' briefs show that in
2004 Republic Bank loaned plaintiffs $166, 683 in exchange
for a mortgage on real property commonly known as 2021 Grange
in Trenton, Michigan. Defs.' Ex. A. In 2010 the mortgage
was assigned to BAC Home Loans Servicing, L.P.
(“BANA”). Defs.' Ex. B. By letter dated
February 24, 2015, BANA notified plaintiffs that their
“loan payment is past due and your property may be
referred to foreclosure unless immediate action is
taken.” Defs.' Ex. C (Pg ID 203). By letter dated
June 30, 2015, BANA notified plaintiffs that their loan
“is in serious default” and that if the default
was not cured by August 9, 2015, “the mortgage payments
will be accelerated . . . and foreclosure proceedings will be
initiated at that time.” Defs.' Ex. C (Pg ID
207-208). By letter dated August 6, 2015, BANA notified
plaintiffs that their “mortgage loan payment is past
due and your property may be referred to foreclosure unless
immediate action is taken.” Defs.' Ex. C (Pg ID
By letter dated January 10, 2017, BANA informed plaintiffs:
You were approved and offered a trial period plan or
permanent loan modification. . . . [W]e regret to inform you
that you are not eligible at this time for Federal Housing
Administration Home Affordable Modification Program
(FHA-HAMP) Modification with Partial Claim for the following
- You didn't make all of the required Trial Period Plan
payments on time.
If you believe our decision is incorrect, you have 30
calendar days from the date of this letter to contact us . .
* * *
During the 30-day period in which you may contact us and
provide information that you believe shows our decision is
incorrect, we may begin or resume the foreclosure process and
even conduct a foreclosure sale, as permitted by your loan
documents and applicable law.
Defs.' Reply Ex. 1.
sheriff's sale on February 16, 2017, BANA bid $108, 000
and obtained a sheriff's deed to 2021 Grange. Defs.'
Ex. D. The deed states that “a notice was duly
published and a copy thereof was duly posted in a conspicuous
place upon the premises described in said mortgage that the
said premises . . . would be sold on 16th day of February,
2017, at a public vendue that being the place of holding the
Circuit Court for Wayne County.” Id.
However, the referenced notice, which was published in the
Detroit Legal News on June 8, June 15, June 22, and June 29,
2016, stated that the sheriff's sale would take place
“at 11:00 AM on July 7, 2016.” Id. (Pg
ID 219-22). Defendants have offered no proof that they
published any notice of the date when the sheriff's sale
actually took place, i.e., February 16, 2017. The deputy
sheriff appointed to make the sale avers that she adjourned
the sale at BANA's request from July 7, 2016, to July 14,
2016, and then every week thereafter until February 16, 2017,
and that she “posted the Notice of Adjournment before
or at the time of the sale and at the place of the
sale.” Defs.' Reply Ex. 2 (Pg ID 315-347).
letter dated April 12, 2017, BANA notified plaintiffs that
“[t]he servicing of your home loan will transfer to
Carrington Mortgage Services, LLC on May 02, 2017.”
Defs.' Ex. F. This notice stated that as of that date
“the servicing of your above referenced mortgage loan
will transfer to Carrington [which] . . . will support all of
your loan servicing, including billing, payment processing,
and customer support.” Id. On May 16, 2017,
BANA assigned the mortgage to Wilmington Savings Fund
Society, FSB, as Trustee of Stanwich Mortgage Loan Trust.
Defs.' Ex. E. This mortgage assignment was prepared by
Carrington. Id. On August 7, 2017, plaintiffs
commenced the instant action. In a letter to plaintiffs dated
September 19, 2017, BANA that “[w]e've received
your recent home loan request and are in the process of
concluding our review.” Pls.' Ex. 4.
claim that defendants breached the terms of the loan and
mortgage “by moving forward with a total acceleration
of the debt and a default in the contract without notice as
required by the contract.” Am. Compl. ¶ 25. They
also claim that defendants' failure to give notice
“resulted in [their] loss of the right to cure the
default/acceleration under the contract.” Id.
¶ 30. In the wrongful foreclosure count, plaintiffs
claim that defendants “never notified [them] of the
actual sale date on February 16, 2017 (by posting or
publication) as required by Michigan law.” Id.
¶ 37. Further, plaintiffs allege that they “were
lead to believe by agents of the Defendant that no sale had
taken place and that they were awaiting the next ...