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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Published In: Finance & Banking Updates, Residential Real Estate Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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