Michigan Court Reaffirms Mortgagor’s Right to Contest Validity of Foreclosure by Advertisement in Summary Proceeding Action
On January 12, 2017, the Michigan Court of Appeals issued an unpublished opinion in the matter of JPMorgan Chase Bank v Zair. The Zair case is important as a reminder that a mortgagor may, for the first time in any proceedings, contest the validity of the foreclosure by advertisement sale in the summary proceeding.
The case involves real property located in West Bloomfield. Defendants Kays Zair and Patrice Zair (“Zair”) were the record title owners of the real property and executed a promissory note and mortgage against the property in favor of Peoples State Bank in April of 2002 (“Peoples mortgage”). In December of 2006, the Zairs executed a promissory note and mortgage in favor of JPMorgan Chase Bank (“JPMorgan mortgage”). JPMorgan Chase claimed that a subordination agreement was entered into between Peoples State Bank and JPMorgan Chase Bank so that the Peoples mortgage was made subordinate to the JPMorgan mortgage, placing the JPMorgan mortgage in a first/senior lien position against the property.