Wants Court To Decide If “Operation of law” Applies To Loans JPMorgan Acquired From The FDIC
Steve Dibert, MFI-Miami
Last month, the Michigan Supreme Court accepted an appeal by JPMorgan Chase for the Supreme Court to hear Kim v. J.P. Morgan Chase. In January, the Michigan Court of Appeals shot down JPMorgan Chase’s claims that the requirements under MCL600.3204(3) doesn’t apply to loans they acquired from Washington Mutual.
MCL 600.3204(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 evidencing the assignment of the mortgage to the party foreclosing the mortgage.
JPMorgan Chase argued MCL600.3204(3) doesn’t apply to to the loans they acquired from Washington Mutual because they acquired the loan “by operation of law” when they acquired the loan from Washington Mutual. What this means is JPMorgan is claiming they don’t need to show a recorded chain of ownership because they acquired the note through their acquisition of Washington Mutual’s assets after Washington Mutual was placed into FDIC receivership in 2008. The Court of Appeals disagreed and said that a claim of “by operation of law” could only be claimed by the FDIC and that a mortgage assignment from the FDIC to JPMorgan Chase still had to be properly recorded with the Register of Deeds.
The appeal to the Supreme Court will be limited to the issues of whether the defendant acquired the couple’s loan by operation of law and, if so, whether the foreclosure by advertisement statute applies to the acquisition of a mortgage by operation of law.