Recent Court of Appeals Decision Impacts Michigan Affidavits to Expunge Foreclosure Sales
A common vehicle used to rescind foreclosure sales in Michigan was addressed in a recent Court of Appeals Opinion known as Wilmington Saving Fund Society Fsb v. Roger Duane Clare, 336715 (Mich. Ct. App. 2018). While the Court opined that an expungement affidavit that creates the condition that effects the land is invalid it did not wholly forbid the practice. The interpretation of the Court was focused upon the statute that allows for the recording of an affidavit stating facts relating to matters affecting realty, MCL 565.451a. This statute is routinely used to clarify matters of record title, including placing unrecorded mortgages of record when the original is misplaced. The issue that led the Court to find that the affidavit expunging the foreclosure sale was invalid was that the affidavit was not stating facts about a given condition, rather, the affidavit purported to create the condition and then attest to the happening of that condition.
It was held that a party cannot unilaterally revoke a foreclosure sale by recording an affidavit that merely states that it “agrees” to do so. This does not necessarily forbid an affidavit where the parties mutually agree to rescind the foreclosure. It is therefore suggested that going forward, in order to avoid potential contests to the affidavit, that the benefit of the mortgagor be clearly enumerated (describing the pre-existing condition upon which the rescission is based) and that the signatures of the mortgagors be affixed to the affidavit. Should the mortgagor be unwilling to execute the document then litigation will likely be required.