Lenders Must Record Mortgage Interest Prior to Foreclosure, Appeals Court Rules

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A recent decision by the Michigan Court of Appeals may serve as the basis for other homeowners to challenge what are likely to be thousands of sheriff's sales that occurred before the banks' mortgage interest was recorded. In a unanimous decision in Kim v JP Morgan Chase Bank, the court ruled that Chase was not authorized to proceed with a sheriff's sale under Michigan's foreclosure by advertisement statute because Chase had not recorded its mortgage interest before the sheriff's sale occurred.

As a published decision, the Kim ruling is binding on all Michigan circuit courts and subsequent panels of the Court of Appeals that address the same issue.

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