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Johnson v. PHH Mortgage Corp.

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

March 15, 2018

JENNIFER JOHNSON and KEITH HILL, as legal guardian of JANELLE HILL, Plaintiffs,
v.
PHH MORTGAGE CORPORATION, PINGORA LOAN SERVICING, LLC, FEDERAL NATIONAL MORTGAGE ASSOCIATION, and PRIORITY RESIDENTIAL SOLUTIONS, INC., Defendants.

          OPINION AND ORDER DENYING PLAINTIFFS' MOTION FOR PRELIMINARY INJUNCTION

          LINDA V. PARKER U.S. DISTRICT JUDGE

         This action arises out of a residential mortgage foreclosure. Plaintiffs currently seek a preliminary injunction extending the expiration of the redemption period and enjoining their eviction from the foreclosed property. The redemption period has expired, however, and thus the Court only considers Plaintiffs' request to enjoin their eviction. Upon review, the Court is not persuaded that the issuance of a preliminary injunction is proper and therefore denies Plaintiffs' motion.

         I. FACTUAL AND PROCEDURAL BACKGROUND

         On December 15, 2014, Plaintiffs Jennifer Johnson and Janelle Hill, by Keith M. Hill, attorney in fact, purchased a parcel of real property located at 6986 Lexington Drive, West Bloomfield, MI (the “Property”). (Defs.' Resp. Br. at 1.) In order to finance the purchase, Plaintiffs obtained a loan in the amount of $328, 000 from Mortgage Solutions of Colorado, LLC, for which they executed a Mortgage identifying Mortgage Electronic Registration Systems, Inc. (“MERS”) as the nominee for the lender. (Id. & Ex. A.) The Mortgage was properly recorded on June 2, 2015. (Id.)

         Plaintiffs defaulted on the Mortgage shortly thereafter, on September 28, 2015, and Defendant PHH Mortgage Corporation (“PHH”) sent them a breach notice. (Id. Ex. B.) PHH notified Plaintiffs that they had thirty-five days from the date of the letter to cure the default. (Id.)

         There were subsequent attempts at loss mitigation, with Plaintiffs failing to complete the necessary steps to complete the application and then to accept and satisfy the trial loan modification. (Id. Exs. C & D.) Plaintiffs allege in their Complaint that they were confused by the information they received from PHH and therefore engaged Defendant Priority Residential Solutions, Inc. (“PRS”) to assist them with the loan modification process. (Compl. ¶ 31.) Plaintiffs allege that their subsequent failure to accept and complete the trial loan modification is due to PRS' failure to communicate their acceptance to PHH. (Id. ¶¶ 42-45.)

         Eventually Plaintiffs' loan was referred to Trott Law, P.C. to initiate foreclosure by advertisement proceedings. On August 8, 2016, a notice was sent to Plaintiffs indicating the debt was being accelerated and foreclosure had commenced. (Id. Ex. E.) In response, Plaintiffs again attempted to engage PHH in loss mitigation discussions, but they again failed to provide a complete application and PHH declined to complete the review process. (Id. Ex. F.)

         Prior to the foreclosure sale, the Mortgage was assigned to Defendant Pingora Loan Servicing, LLC (“Pingora”) pursuant to an Assignment of Mortgage. (Id. Ex. G.) The Assignment was recorded on September 15, 2016. (Id.)

         A Sheriff's Sale of the Property was held on October 18, 2016, with Defendant Federal National Mortgage Association (“Fannie Mae”) as the successful bidder. (Id. Ex. H.) The six-month statutory redemption period for the Property expired on April 18, 2017, with Plaintiffs failing to redeem.

         One day earlier, Plaintiffs initiated this action in Michigan state court and filed a motion for temporary restraining order and preliminary injunction. A state court judge entered an ex-parte TRO on April 18, 2017. (ECF No. 1-6.) The order enjoins

Defendants from evicting Plaintiffs, or otherwise assigning, conveying or otherwise transferring the Subject Property at issue to a third party, pending a hearing relative to Plaintiffs' request for a Preliminary and/or Permanent Injunction seeking the same relief through trial.[1]

(Id.) The state court judge set a hearing for May 17, 2017. (Id.)

         A day before the hearing, the served defendants (i.e., all defendants except Priority Residential Solutions, Inc.) removed Plaintiffs' Complaint to federal court based on original subject matter jurisdiction. (ECF ...


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