Quiet title action following a mortgage foreclosure; Foreclosure by advertisement (MCL 600.3201 et seq.); MCL 600.3204(1)(a) & (d); MCL 600.3204(3); Consideration of the documentary evidence; Motion for summary disposition under MCR 2.116(C)(10); Jimkoski v. Shupe; Summary disposition before any discovery was conducted; Caron v. Cranbrook Educ. Cmty.; Setting aside a mortgage foreclosure due to an irregularity; Sweet Air Inv., Inc. v. Kenney; Mortgage Electronic Registration Systems, Inc. (MERS)

The court held that the trial court erred in granting defendants summary disposition under the circumstances of this quiet title action following a mortgage foreclosure. Plaintiff essentially contended that the foreclosure was void ab initio because defendant-MERS “did not own or have any interest in the indebtedness secured by the second mortgage, and thus, had no such interest to assign to” defendant-SRP 2012-4, the foreclosing entity. She argued that “SRP 2012-4 was not the owner of the indebtedness or of an interest in the indebtedness secured by the second mortgage that MERS originally held and purportedly assigned to it because after she entered into a loan modification agreement” with nonparty-Faslo Solutions, Faslo became the owner of the indebtedness, which was paid off when she modified the first mortgage in 2009. Plaintiff noted that the holder of the first mortgage was nonparty-CIT Bank. She offered a “copy of her credit report showing that her account with Faslo was ‘Paid and Closed’” in 2010. However, for some unknown reason, “the discharge of the second mortgage was apparently not recorded.” She argued that, as part of her bankruptcy case in 2018, “CIT Bank submitted its Proof of Claim as including both the first and the second mortgage,” which was more evidence that the second mortgage was paid off when she modified the first mortgage. She consistently argued that “neither MERS nor SRP 2012-4 were owners of the indebtedness or of an interest in the indebtedness secured by the second mortgage.” Also, she “consistently argued that she entered into a loan modification agreement with [Faslo]—who by its plain terms became her new ‘Lender’ with regard to the second mortgage and, as shown on her credit report which she provided, that account had been ‘Paid and Closed’ years ago.” Thus, she consistently argued “that SRP 2012-4 had no legal right to foreclose” on the basis of “a ‘default’ on the second mortgage.” Defendants also mischaracterized her trial court argument. She argued “that MERS had no interest to assign to SRP 2012-4 because the indebtedness did not exist—it had been paid.” The court concluded that “the trial court failed to take into consideration the documentary evidence” plaintiff submitted. Further, the case was dismissed before any discovery could be conducted on “whether SRP 2012-4 was actually the owner of indebtedness related to” the second mortgage. If she can show that it “did not own an interest in her indebtedness that was secured by the second mortgage because [Faslo] had owned the interest and that debt was paid, a significant irregularity would exist to set aside the foreclosure sale.” Reversed and remanded.