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Defect in foreclosure proceeding is not grounds for setting aside foreclosure unless Plaintiff establishes prejudice

Holding that there was no factual support for plaintiff's newly raised claim on appeal that former MCL 600.3204(4)(d) was violated, and rejecting his claim that former MCL 600.3205c(5) was violated, the court affirmed the trial court's order granting the defendant-bank summary disposition in this action seeking judicial intervention in a foreclosure sale. While the gravamen of his complaint was that the foreclosure was illegal, the court agreed with defendant that plaintiff failed to present the trial court with his arguments as to MCL 600.3204(4)(d) and MCL 600.3205c(5). It nonetheless considered plaintiff's arguments to the extent that the submitted evidence permitted review, but declined to consider evidence submitted with his brief on appeal that was not submitted to the trial court. As to his claim based on former MCL 600.3204(4)(d), there was "no factual basis in the record for treating plaintiff's property as tax exempt under MCL 211.7cc and, thus, to subject the property to the requirements of former MCL 600.3204(4)." The court also noted that he was not entitled to relief "because a statutory defect in a foreclosure proceeding is not grounds for setting aside a foreclosure sale unless the plaintiff establishes prejudice," which he failed to do. As to former MCL 600.3205c(5), former MCL 600.3205c(1) provided that "[i]f a borrower has contacted a housing counselor under section 3205b but the process has not resulted in an agreement to modify the mortgage loan, the person designated under section 3205a(1)(c) shall work with the borrower to determine whether the borrower qualifies for a loan modification . . . ." Plaintiff failed to show that the prerequisite in subsection (1) was violated, and this was fatal to his claim that MCL 600.3205c(5) was violated. Further, even if he could establish a violation, the remedy "would have been for plaintiff to file an action in circuit court to convert the foreclosure proceeding to a judicial foreclosure." In this case, the foreclosure sale had already taken place. The court rejected his claim that violation of MCL 600.3205c would entitle him to have the foreclosure sale set aside, noting that the six-month redemption period ended in 12/11, and "plaintiff no longer has standing to bring a cause of action related to the property."


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