MICHIGAN SUPREME COURT HOLDS THAT JPMORGAN CHASE DID NOT ACQUIRE WAMU LOANS FROM FDIC BY OPERATION OF LAW AND IS REQUIRED TO PROVE OWNERSHIP THROUGH EVIDENCE

December 28, 2012

In a decision rendered on December 21, 2012, the Supreme Court of Michigan held that JPMorgan Chase did not acquire any WaMu loans from the FDIC by operation of law, as when a subsequent mortgagee acquires an interest in a mortgage through a voluntary purchase agreement with the FDIC, the mortgage has not been acquired by “operation of law” and that subsequent mortgagee must comply with the provisions of MCL 600.3204 and record the assignment of the mortgage before foreclosing by advertisement. The decision affirmed the prior decision of the Michigan Court of Appeals on this issue.

The case is Kim v. JPMorgan Chase Bank, NA, Docket No. 144690, 2012 Mich LEXIS 2220, which affirmed the Court of Appeals’ reversal of the trial court’s summary judgment in favor of JPM. The Court of Appeals found that JPM’s failure to record the assignment rendered the Sheriff’s sale void ab initio, but the Supreme Court held that it is voidable.

The problem for JPM, in a Michigan non-judicial foreclosure, is that it will have to prove that it acquired a specific mortgage loan from WaMu, which is going to be difficult in light of the sworn deposition testimony of Lawrence Nardi (previously posted on this website) that there was never a schedule of WaMu mortgage loans purchased from the FDIC and that such a schedule does not exist, and JPM’s admission, in the D.C. Federal litigation, that it is not the “successor in interest” to WaMu. Given this record evidence and judicial admission, any purported “assignment” of a WaMu loan to JPM out of the FDIC would be suspect at best.

The opinion does not discuss these issues, which were apparently not raised and as the opinion strictly limited its holding to whether JPM acquired the homeowner’s WaMu loan “by operation of law”. Thus, all of the evidentiary issues as to whether there was any effective transfer of the homeowner’s loan to JPM remain to be raised.

This is a step in the right direction on a major point, as JPM has made the assertion, in litigation in several states, that it became the owner of a homeowner’s WaMu mortgage loan “by operation of law”, which assertion has now been proven by the Supreme Court of Michigan to be false.

Thanks to one of our dedicated followers for bringing this important decision to us.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

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