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Invalid mortgage assignment does not prevent foreclosure where owners defaulted under mortgage

Holding that the plaintiffs lacked standing to challenge the mortgage assignment, and that even if they had standing, summary disposition was appropriate on the merits of their quiet title claim, the court affirmed the trial court's order granting defendants-Nationstar Mortgage and Citibank summary disposition. The FDIC was named the receiver for the parent company of plaintiffs' mortgagee. The FDIC assigned the mortgage to defendant-Citibank, and it was recorded. "In 2012, plaintiffs defaulted on the mortgage," and Nationstar Mortgage (presumably the loan servicer), provided them with a foreclosure notice pursuant to MCL 600.3205a, indicating intent to foreclose by advertisement. Plaintiffs tried to negotiate a modification but were denied. Defendants proceeded with publishing a notice of foreclosure for four consecutive weeks. Plaintiffs sued to quiet title, alleging that the assignment of the mortgage to defendants was invalid and, thus, plaintiffs had superior title. "The long-settled rule in Michigan is that a person who is not a party to an assignment lacks standing to challenge it." Plaintiffs admitted "they defaulted under the mortgage by failing to make their required payments, which triggered defendants' right to foreclosure." Thus, they had "no defenses to payment or foreclosure under the loan documents." By arguing only that the mortgage assignment was invalid, they sought to assert the rights of third parties, where there was no evidence that those parties object to the assignment. Further, there was no evidence that plaintiffs' concerns about the assignment related to the need to protect themselves from double liability. The court rejected their reliance on Lansing, noting that while "plaintiffs may be able to bring a quiet title action pursuant to MCL 600.2932, the statute does not speak to the specific nature of the challenge brought by plaintiffs in this case - the invalidity of the underlying assignment." Further, they lacked "a substantial interest that may be detrimentally affected by the assignment. While the assignment generally relates to their property, there is no question that the mortgagee, whoever that may be, had the right to seek foreclosure based on plaintiffs' default and failure to cure." It was clear that defendants had superior title to the property, evidenced by the assignment recorded in the county Register of Deeds. Pursuant to MCL 600.3204(3), they were able to foreclose because there was a record chain of title evidencing the assignment of the mortgage.

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