The Fifth District Appellate Court has reversed St. Clair County Circuit Judge Stephen McGlynn in a residential foreclosure case that went in favor of mortgage holder Citimortgage.
Homeowners Leonard W. and Kimberly A. Adams were sued by Citimortgage in 2011 for allegedly failing to make monthly payments on a mortgage they took out on a single family home in Belleville in 2005.
McGlynn granted summary for Citimortgage in May 2012. A sale took place several months later in August, and in October McGlynn approved the report of sale and distribution.
In November, the Adamses filed their first motion to reconsider and for other relief asking the court to set aside the foreclosure sale, saying that in May 2012 they had applied for the Home Affordable Modification Program (HAMP) - a component of the federal government's bailout of the U.S. financial system in 2008.
According to the record, Citimortgage sent the Adamses letters on two separate dates in July 2012 saying it would take approximately 30 days to review their May application.
On Aug. 29, 2012, Citimortgage told the Adamses in a letter that their application could no longer be used because the dates in the application were expired. The letter was sent in response to Leonard Adams' request for a status update made on Aug. 27, 2012.
After argument, McGlynn took under advisement the Adams' motion to reconsider. On Nov. 26, 2012, McGlynn found that Citimortgage failed to properly and timely respond to the Adams' request to participate in the foreclosure prevention program and that it failed to complete review of their request to participate.
On Feb. 25. 2013, Citimortgage informed the Adamses in a letter that their application was denied because Fannie Mae had "not given us the contractual authority to modify your loan under this program."
On May 30, 2013, McGlynn again entered order approving report of sale and distribution and confirming sale and order of possession.
A second motion to reconsider was filed by the Adamses on June 27, 2013. Citimortgage responded. McGlynn denied the Adams' second motion to reconsider and for other relief on Aug. 26, 2013.
On appeal, the couple claimed that the court should have set aside the sale. They further argued that their property was sold in violation of the HAMP program and that Citimortgage should have been required to comply with it.
Citimortgage responded that the Adamses didn't raise the HAMP argument until they appealed "and, therefore, they did not properly preserve the issue for appeal."
Citimortage was represented by Adam D. Grant of Detroit on appeal.
The Adamses were represented by Anthony R. Garavalia of Belleville.
The Fifth District reversed McGlynn's findings with directions that include considering the disposition of the HAMP application and whether Citimortgage's action and inaction constituted a material violation of HAMP.
Justice Richard Goldenhersh wrote the court opinion published July 20. Justices Judy Cates and Melissa Chapman concurred.
Goldenhersh wrote that Citimortgage and the Adamses disagree about whether the Adamses applied for HAMP assistance before the foreclosure sale.
"The trial court was not informed that defendants had applied for assistance under HAMP prior to confirmation of the foreclosure sale, and should have been made aware of this information before determining whether to confirm the foreclosure sale," he wrote.