Justia Real Estate & Property Law Opinion Summaries

The Michigan State Real Estate Transfer Tax, MICH.COMP.LAWS 207.521, and the County Real Estate Transfer Tax, section 207.501, impose a tax when a deed or other instrument of conveyance is recorded during the transfer of real property. The tax is imposed upon “the person who is the seller or grantor.” State and county plaintiffs sought to recover transfer taxes for real property transfers recorded by Fannie Mae, a corporation chartered by Congress to “establish secondary market facilities for residential mortgages,” in order to “provide stability in the secondary market for residential mortgages,” and “promote access to mortgage credit throughout the Nation,” 12 U.S.C. 1716; Freddie Mac, also a corporation chartered by Congress for substantially the same purposes; and the Federal Housing Finance Agency, an independent federal agency, created under the Housing and Economic Recovery Act of 2008, 12 U.S.C. 4617, which placed Fannie and Freddie into conservatorships, 12 U.S.C. 4617(a)(2). When Congress created defendants, it expressly exempted them from “all” state and local taxes except for taxes on real property. The district court entered summary judgment in favor of the plaintiffs, reasoning that “transfer taxes are excise taxes, not taxes on real property. The Sixth Circuit reversed. View "Genesee Cty, v. Fed. Hous. Fin. Agency" on Justia Law

In 2004 Wallace financed a home purchase with a $272,315 mortgage. He took a second mortgage of $164,500 for improvements and to pay down debt. In 2006, Wallace sought a refinance loan of $422,500. Midwest obtained an appraisal from Brock, through the now-defunct Accupraise. A former Accupraise employee explained that Midwest would send a requested appraisal value and Brock would return a tailor-made appraisal, often without seeing the property. Accupraise and Brock valued Wallace’s home at $500,000. Unbeknownst to Wallace, his refinance was an adjustable-rate mortgage that allows negative amortization; he had a teaser rate of two percent that quickly multiplied. For securing a high long-term interest rate, Midwest received a premium in excess of $14,000. The loan created insurmountable financial problems for Wallace. He learned that the true 2006 value of his home was $375,000. Wallace declared bankruptcy, surrendered the home, and sued alleging that he was the victim of a fraudulent scheme violating the Racketeer Influenced and Corrupt Organizations Act and Kentucky conspiracy law. Mediation produced a settlement, under which Wallace prevailed on a RESPA claim. The district court granted defendants partial summary judgment. The Sixth Circuit reversed a finding that Wallace did not sufficiently demonstrate that the appraisal proximately caused his financial injuries, but otherwise affirmed. View "Wallace v. Midwest Fin. & Mortg. Servs., Inc." on Justia Law

Based on a mortgage fraud scheme that caused the U.S. Department of Housing and Urban Development (HUD) to insure loans for unqualified applicants based upon forged documents and false information provided by Wendlandt, he pled guilty to one count of conspiracy to defraud the United States, 18 U.S.C. 371, and was sentenced to 42 months in prison. The Sixth Circuit affirmed, rejecting challenges to the district court’s computation of financial loss for purposes of determining his offense level under U.S.S.G. 2B1.1 and to the court’s decision to vary upward from the advisory Guidelines range of 24 to months in prison. View "United States v. Wendlandt" on Justia Law

Conlin refinanced with a loan from Bergin, secured by a mortgage containing a provision that recognized MERS as a nominee for Bergin and Bergin’s successors. Bergin sold the note to the Real Estate Mortgage Investment Conduit, for which U.S. Bank was trustee. The mortgage was held by MERS, and serviced by GMAC. In 2008, MERS assigned the mortgage to “U.S. Bank National Association as trustee.” In 2010 Orlans sent Conlan notice (Mich. Comp. Laws 600.3205a), of default and of his ability to request loan modification, stating that it was sent on behalf of GMAC as “the creditor to whom your mortgage debt is owed or the servicing agent for the creditor.” In 2011, Orlans published notice of foreclosure sale, stating that “the mortgage is now held by U.S. Bank National Association as Trustee by assignment.” The notice was also posted on the property, which was sold at a sheriff’s sale on March 31. On October 28, 2011, Conlin sought damages and to have the foreclosure sale set aside. The district court dismissed. The Sixth Circuit affirmed. Even if the “robo-signed” assignment were invalid, Conlin was not prejudiced. He has not clearly shown fraud in the foreclosure process, as required for a challenge after expiration of the six-month redemption period. View "Conlin v. Mrtg. Elec. Registration Sys., Inc." on Justia Law

The Debtors, five single-asset limited partnerships holding apartment complexes developed under the Low-Income Housing Tax Credit Program, 26 U.S.C. 42, filed for relief under Chapter 11 in 2010. The properties were put into service in 2005 and 2006, and their tax credit recapture periods expire in 2019 and 2020. The bankruptcy court conducted a valuation hearing and concluded that, for purposes of determining the value of the secured portion of the (mortgage holder) Bank’s claims under 11 U.S.C. 506(a), a determination of the fair market value of the properties included consideration of the remaining federal low-income housing tax credits. The Bankruptcy Panel affirmed the bankruptcy court’s Valuation Order. The Debtors failed to amend their plan or disclosure statement to reflect the values set by the bankruptcy court until ordered to do so in 2012. The court ultimately dismissed the petitions, based on continuing loss to or diminution of the estate, coupled with absence of a reasonable likelihood of rehabilitation; the Debtors’ inability to effectuate a plan; and bad faith under 11 U.S.C. 1112(b). The Sixth Circuit Bankruptcy Appellate Panel affirmed. View "In re: Creekside Senior Apts." on Justia Law

Columbia Gas disagrees with the Singhs over the scope of an existing pipeline right-of-way. Columbia suit in federal court to enjoin the Singhs and their tenant from engaging in activity that Columbia believed could lead to violations of Columbia’s duties under federal laws regulating natural gas service and pipeline safety. Although the cause of action appeared to be an Ohio interference-with-easement claim, Columbia’s complaint referred to the Natural Gas Act, 15 U.S.C. 717–717w, as a basis for federal jurisdiction. Without explicitly addressing jurisdiction, the district court held a status conference at which the parties reached a settlement. When the Singhs refused to comply with Columbia’s understanding of the settlement, the district court granted Columbia’s motion to enforce the settlement. The Sixth Circuit vacated, holding that the district court did not have jurisdiction over this property dispute between nondiverse parties. Columbia’s complaint neither asserted a federal cause of action nor showed that a substantial federal interest was implicated by its state-law claim. View "Columbia Gas Transmission, LLC v. Singh" on Justia Law

Klie purchased property with financing from Coldwell Banker, which assigned its rights to the Federal National Mortgage Corporation (Fannie Mae) but continued to service the loan. The assignment was never recorded. In 2007, servicing rights transferred to JP Morgan. Coldwell Banker assigned its rights in the note and mortgage (none) to JP Morgan, which reassigned to Fannie Mae. Chase, an arm of JP Morgan, serviced the loan until Klie died. With the loan in default, Chase’s law firm, RACJ, prepared an assignment of the note and mortgage that purported to establish Chase’s right to foreclose and filed a foreclosure actionf, naming Glazer, a beneficiary of Klie’s estate. The court entered a decree of foreclosure, but later vacated and demanded that RACJ produce the original note. Chase dismissed the foreclosure without prejudice. Glazer filed suit, alleging that Chase and RACJ violated the Fair Debt Collection Practices Act, 15 U.S.C. 1692, and Ohio law by falsely stating that Chase owned the note and mortgage, improperly scheduling a foreclosure sale, and refusing to verify the debt upon request. Chase and RACJ moved to dismiss. The district court dismissed. The Sixth Circuit reversed, holding that mortgage foreclosure is debt collection under the Act. View "Glazer v. Chase Home Fin. LLC" on Justia Law

Wells Fargo foreclosed on Frank’s home by advertisement. Frank is deceased and Mitan is the estate representative. The Federal Home Loan Mortgage Corporation purchased the home at a sheriff’s sale in February 2010, and the redemption period expired six months later. Two weeks prior to expiration, Mitan sued, claiming that the foreclosure was contrary to Michigan law. The district court dismissed. The Sixth Circuit reversed, holding that the district court did not establish an adequate record to determine whether Wells Fargo complied with the law. If the foreclosure was void, Mitan’s rights were not terminated at the end of the redemption period. When a lender wishes to foreclose by advertisement on a principal residence, it must provide the borrower with notice designating a person whom the borrower may contact to negotiate a loan modification. Mich. Comp. Laws 600.3205a(1). If the borrower requests negotiation, the lender’s designated person may request certain documents. If negotiations fail, the designated person is required to apply statutory calculations to determine whether the borrower qualifies for a loan modification. If the borrower qualifies, the lender may not foreclose by advertisement unless the designated person offers a modification agreement that the borrower fails to timely return. View "Mitan v. Fed. Home Loan Mortg. Corp." on Justia Law

In 2005, the Coyers entered into a mortgage agreement with Option One to purchase property in Linwood, Michigan. Subsequently, HSBC purchased the mortgage. After the Coyers allegedly stopped making payment to HSBC in 2010, HSBC began foreclosure proceedings pursuant to the mortgage contract’s “power of sale” clause. The Coyers filed a complaint asserting numerous allegations concerning alleged illegal conduct routinely practiced in the mortgage industry. They claimed: breach of fiduciary duty; negligence; common law fraud; breach of implied covenant of good faith and fair dealing; violation of the Truth in Lending Act, 15 U.S.C. 1601; and intentional infliction of emotional distress. The district court entered judgment on the pleadings in favor of HSBC. The Sixth Circuit affirmed. View "Coyer v. HSBC Mortg. Servs/, Inc." on Justia Law

In 1992, Haddad purchased a condominium. He timely paid association assessments and lived at the home until 2005. Since then, the condominium has remained vacant or leased. In October 2008, Haddad received a collection letter from the firm, representing the condominium association, stating that Haddad he was in default on $898 of association dues and that if the amount was not paid within 30 days, the association would commence proceedings for a lien against the condominium. In December 2008, Haddad received a second notice. Haddad timely responded to both, requesting verification of the debt. The firm did not verify the debts and recorded a Notice of Lien in May 2009. The condominium association eventually corrected its records. The lien was discharged in 2010. Haddad sued under the Fair Debt Collection Practices Act, 15 U.S.C. 1692, and the Michigan Collection Practices Act (445.251), alleging violations of prohibitions on use of false, deceptive, or misleading representation and continuing collection of a disputed debt without verification of a debt incurred for personal rather than business purposes. The district court granted the firm summary judgment, holding that the assessments were not debts under the statutes because the property was a rental. The Sixth Circuit reversed and remanded. View "Haddad v. Alexander, Zelmanski, Danner & Fioritto, PLLC" on Justia Law