Bulletin: MI000021

Dear Associates:

Michigan Public Act No 186 of 2004 amended MCL 600.3204 subsection (3) to eliminate the requirement that all assignments of the mortgage (except assignments effected by operation of law) be recorded prior to the commencement of a foreclosure by advertisement.

The amended subsection (3) states: ?If the party foreclosing a mortgage by advertisement is not the original mortgagee, a record chain of title shall exist prior to the date of sale under section 3216 (which section provides for the time and place of sale) evidencing the assignment of the mortgage to the party foreclosing the mortgage.

The Act also amended MCL 600.3212 to remove any requirement that the notice of foreclosure include any information about any assignments of the mortgage.

As a result of the amendments to MCL 600.3204 and 600.3212, it is not necessary to verify that all assignments of a mortgage foreclosed after June 30, 2004 were recorded prior to the commencement of the foreclosure.  In lieu of that determination you must determine that there is a chain of title of record evidencing the assignments of the mortgage and that the chain of title is evidenced in the public records prior to the foreclosure sale.

The Act did not specify what needed to be record to satisfy the requirement of  ?a record chain of title?. The Michigan Supreme Court may ultimately determine this issue.

Not infrequently a foreclosing lender is unable to obtain recordable instruments evidencing assignments of mortgage and will attempt to establish a record chain evidencing the assignment by other means.  One such alternative means that comes to mind is an affidavit by the foreclosing lender or other party in a position to know the facts setting forth a chain of title of the one or more assignments from the original mortgagee to the foreclosing lender.

In the event you are asked to insure the purchaser at the foreclosure sale or the purchaser from a foreclosing lender that purchased at the sale and the foreclosing lender has elected to record a chain of title document rather than assignments of mortgage, please verify the sufficiency for title insurance purposes of the recorded document evidencing the chain of assignment with the Michigan underwriting department

At a future date, we hope to be in a position to provide further guidelines concerning what is an acceptable chain of title as provided for in MCL 600.3204 as amended.

Attachments

Exhibit A:         _______________

Exhibit B:          _______________