The mortgagor borrowed money to purchase his home in 2003. In 2023, the mortgagor checked his credit report and found his home loan balance significantly reduced. Confused about the reduced loan balance, the mortgagor and his wife called the service provider; and a customer service representative informed them of a debt cancellation and that they would receive notice of the cancellation within ten days. The mortgagor and his wife never got the notice and refused to pay their mortgage until they received the notice in the mail. The mortgagee initiated foreclosure proceedings under Michigan’s foreclosure-by-advertisement provision provided for in the Michigan Compiled Laws §§ 600.3208 and 600.3212. The sheriff’s department auctioned off the mortgagor’s property and gave the mortgagor six months to redeem the property by paying the auction amount plus interest. The mortgagor did not redeem the property and filed a complaint against the mortgagee to set aside the sheriff’s auction and prevent the transfer of the property. After the court entered an eviction order, the mortgagor filed an amended complaint requesting the set aside due to fraud. The mortgagor alleged that the mortgagee had committed fraud by receiving the sale amount from the auction and also by receiving the tax write-off amount for the debt cancellation. On appeal, the issue was whether any alleged fraud on the part of the mortgagee or the service provider prejudiced the mortgagor so as to invalidate the foreclosure proceedings.
In Harvey v. Citigroup Mortg. Loan Tr. 2021-P4, No. 24-2057, 2025 U.S. App. LEXIS 18996 (6th Cir. July 29, 2025) (unpublished opinion), the court affirmed the district court’s grant of the mortgagee’s motion for summary judgment. The court noted the mortgagor abandoned his federal statutory and regulatory claims by failing to brief them on appeal. Of the issues raised, the court first applied the rule that once the statutory six months after the sheriff’s sale passed, it could only set aside the foreclosure upon a “clear showing” of fraud or irregularity “related to the foreclosure proceeding itself.” The court found that the mortgagor did not exercise his right to redeem the property within six months and thus had surrendered his rights to the property. Even if the mortgagor correctly claimed that the debt cancellation served as a fraudulent tax write-off for the mortgagee, he still had defaulted on the remaining balance. Next, the court held that the mortgagor failed to show noncompliance with state foreclosure law or fraud related to the proceedings. Additionally, the court ruled that the mortgagor offered no evidence of prejudice against him in the foreclosure process. Because the court can only set aside foreclosure after the statutory period due to related fraud or irregularity, and the mortgagor had failed to provide enough facts to support his claim, the court upheld the summary judgment order.
By Lawrence Clark [email protected]
Edited By Taylor O’Brien [email protected]
Edited By Callighan Ard [email protected]
Edited By Hayden Mariott [email protected]