Now Accepting New Clients!

Bank has standing to seek reformation of legal description in foreclosure

The court affirmed the trial court's judgment of foreclosure as to the real property at issue, holding that plaintiff-Deutsche Bank had standing to seek reformation of the mortgage instrument and that the trial court properly granted plaintiffs' motion to reform the legal description of the property in the mortgage. Defendants obtained a loan, which was secured by a mortgage on their property that named MERS as the mortgagee. MERS assigned the mortgage to Deutsche Bank, which, with its then-servicer, brought this case for judicial foreclosure based on defendants' failure to make monthly payments as required by the promissory note, and for reformation of the mortgage. Defendants argued on appeal that the trial court erred in denying their countermotion for summary disposition, which was based on their claim that Deutsche Bank lacked standing to seek reformation of the mortgage. Defendants relied on two cases (Mate and Harwood) addressing reformation of insurance policies in support of their claim that Deutsche Bank lacked standing to seek reformation of the mortgage. Neither case addressed a party's standing under Lansing. Plaintiffs sought reformation of a mortgage instrument that secured a promissory note for a loan made to defendants, but undisputedly contained an inaccurate legal description of defendants' property. "As the named mortgagee in the mortgage instrument, MERS acquired ownership of the security lien on the property." Since Deutsche Bank acquired the mortgage through an assignment by MERS, "it possessed the same rights as MERS." While the rights Deutsche Bank acquired from MERS "did not include the promissory note itself, the trial court determined that the submitted evidence showed that Deutsche Bank was also the holder of the promissory note under MCL 440.3205(2), which provides that '[w]hen endorsed in blank, an instrument becomes payable to bearer and may be negotiated by transfer of possession alone until specially endorsed.'" Defendants did not contest the trial court's determination as to Deutsche Bank's status as the holder of the promissory note. Considering that it "acquired both the ownership of the mortgage and the beneficial interest thereof as the holder of the promissory note," it had standing to seek reformation of the mortgage. Defendants' argument that the mistake in the mortgage affected Deutsche Bank's entitlement to seek foreclosure illustrated that there was "a substantial interest that could be detrimentally affected" if Deutsche Bank was not allowed to request reformation.

Don't let a bad decision, unfair contract, or a messy divorce get in the way of a promising future!
Contact the experienced team at Aldrich Legal Services today to schedule your free initial
and secure reliable and trustworthy representation today!
Get the Help You Need From a Team You Can Truly Count On: (734) 404-3000