STATE OF MICHIGAN IN THE CIRCUIT COURT FOR THE COUNTY OF WAYNE FEDERAL HOME LOAN MORTGAGE CORP, Plaintiff/Appellee,

v Case No. 12-004097-AV Hon. Jeanne Stempien Lower Ct. Case No.: 11 F3556 Hon. Michael K. McNally PATRICK J. MCENHILL and CAROLYN F. MCENHILL Defendants/Appellants. ________________________________________________________________________ Rana Razzaque (P67627) Keith G. Tatarelli (P41725) Trott & Trott, P.C. Attorney for Defendants/Appellants Attorney for Plaintiff/Appellee 1800 Crooks, Ste. C 31440 Northwestern, Ste. 200 Troy, MI 48084 Farmington Hills, MI 48334 (810) 338-6361 or (248) 220-7140 (248) 723-6452 ________________________________________________________________________ DEFENDANT/APPELLANTS BRIEF ON APPEAL ORAL ARGUMENT REQUESTED

TABLE OF CONTENTS Index of Authorities ...........................................................................................................ii Statement of Jurisdiction ...................................................................................................iii Statement of Questions Presented .................................................................................... iv Introduction ....................................................................................................................... 1 Statement of Facts ............................................................................................................. 2 Law and Analysis .............................................................................................................. 4 I. FORECLOSING PARTIES MUST STRICTLY ADHERE TO STATUTORY MANDATES..4 II. THE FORECLOSING PARTY WAS ABN, NOT CITI, AND ABN VIOLATED MCL 600.3204(d)(1)..4 III. CITI DID NOT RECORD ITS INTEREST PRIOR TO THE SHERIFFS SALE AND THUS VIOLATED MCL 600.3204(3)5 Relief Requested.7 Proof of Service...8 Index of Exhibits ................................................................................................................9

INDEX OF AUTHORITIES Cases: Dohm v. Haskin, 88 Mich 144 (1891)..4 Kim v JP Morgan Chase Bank, [published January 12, 2012].3, 6-7 Lee v. Mason, 10 Mich 403 (1862)..4 Man. Han.Mtg. Co. v. Snell, 142 Mich App 548 (1985)..4 Massella v. Besson,359 Mich 512 (1960).4 Reid v. Rylander, 270 Mich 263 (1935)4 State Statutes: MCL 600.3204(1)(d).................................................................................................3-5 MCL 600.3204(3)..5-6 State Court Rules: MCR 4.201(N) and MCR 7.101.iii

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STATEMENT OF JURISDICTION This is an appeal as of right of a judgment of possession entered by 33rd District Court Judge Michael K. McNally in favor of Plaintiff-Appellee Federal Home Loan Mortgage Corporation against Defendant-Appellants Patrick and Carolyn McEnhill after Plaintiff foreclosed on their home and after the redemption period had expired. The trial courts Order was entered on January 12, 2012 after the court granted Plaintiffs Motion for Summary Disposition and denied Defendants Motion for Summary Disposition. A Motion for Reconsideration was filed by Defendants on February 14, 2012. After a hearing on March 13, 2012 the Motion for Reconsideration was denied by the Trial Court. [Exhibit 1, Order]. This honorable Court has jurisdiction over Defendants-Appellants Claim of Appeal pursuant to MCR 4.201(N) and MCR 7.101.

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STATEMENT OF QUESTIONS PRESENTED 1. DID THE FORECLOSURE OF DEFENDANTS-APPELLANTS HOME COMPLY WITH MCL 600.3204(1)(d)? Defendants-Appellants say YES The trial court said NO 2. DID THE FORECLOSURE OF DEFENDANTS-APPELLANTS HOME COMPLY WITH MCL 600.3204(3)? Defendants-Appellants say NO The trial court said YES

iv.

INTRODUCTION This case demonstrates the disregard by foreclosing entities of the strict mandates imposed on mortgage lenders and/or servicers in their (often understandable) pursuit to foreclose on distressed homeowners. Insofar as the Michigan legislature has chosen to allow (properly) foreclosing entities the luxury and convenience of a non-judicial foreclosure process, it is just and fair to demand such entities at minimum strictly adhere to the statutes governing foreclosure. Defendants-Appellants ask this Honorable Court to grant their appeal by exercising its power to set aside the foreclosure/Sheriffs Deed on Mortgage Sale due to PlaintiffAppellants failure to adhere to what are essentially simple statutory mandates attendant to non-judicial foreclosure. And, should this Honorable Court sanction DefendantsAppellants appeal, no windfall will be bestowed. Plaintiff-Appellant can and most likely will again pursue foreclosure. However, given Defendants-Appellants improved financial condition (since the previous foreclosure), perhaps a loan modification or simple reinstatement of the loan can spare the county from yet another vacant home.

STATEMENT OF FACTS On or about March 3, 2003 Defendants Mr. and Mrs. McEnhill entered into a mortgage and accompanying Promissory note with loan Originator (and foreclosing party by way of advertisement) ABN AMRO Mortgage Group, Inc.. (ABN). ABN was identified as the Mortgagee. Defendants defaulted on the loan. ABN was identified as the foreclosing party in all published foreclosure by Advertisement(s), the first commencing on 12/17/2010. [Exhibit 2] ABN was acquired by CitiMortgage, Inc. (CITI). in March 2007. The Certificate of Merger [Exhibit 3] announced and asserted that ABN would no longer act as a separate corporation and from that time forward be known as CitiMortgage, Inc.. The MI Department of Labor & Economic Growth certified ABNs Certificate of Withdrawal on May 17, 2007. In its September 11, 2007 Application for Certificate of Withdrawal filed with the Michigan Department of Labor & Economic Growth Bureau of Commercial Services, ABN asserted The corporation is not transacting business or conducting affairs in the State of Michigan / The corporation hereby surrenders its authority to transact business or conduct affairs in Michigan. [Exhibit 4] CITI never was identified as the foreclosing party in any of the advertisements of foreclosure, despite the pronouncements of the Certificate of Merger. And, CITI did not record its interest prior to the Sheriffs Deed on Mortgage sale. The Sheriffs Deed on Mortgage Sale which purportedly conveyed title to PlaintiffAppellant Federal Home Loan Mortgage Corporation (Freddie Mac) occurred on January 19, 2011. The redemption period passed and Freddie Mac commenced eviction proceedings in the 33rd District Court on 9/23/2011. 2

After initial appearance, Defendants-Appellants filed their Motion for Summary Disposition on October 1, 2011. Plaintiff-Appellant filed an Answer and Counter-Motion for Summary Disposition on October 6, 2012. The Hearing on Motion(s) was stayed pending a Chapter 7 bankruptcy petition (which ultimately led to successful discharge). Defendants-Appellants then filed an Addendum to their initial Motion for Summary Disposition on January 2, 2012. [The addendum reiterated and expanded on Appellants argument that the foreclosure violated MCL 600.3204(1)(d)]. On January 12, 2012 after entertaining oral argument the trial court granted Plaintiffs Motion for Summary Disposition and denied Defendants Motion for Summary Disposition. The Courts decision was based on its (flawed and counterfactual) finding that CITI was the foreclosing party and thus no violation of MCL 600.3204(1)(d) had transpired. [Exhibit 5, Transc. p. 5] A Motion for Reconsideration was filed by Defendants-Appellants, arguing that the foreclosure violated MCL 600.3204(3) (premised on the Kim v JP Morgan Chase Bank, [published January 12, 2012] and the Court of Appeals interpretation of the mandates of the statute. After a hearing on March 13, 2012 the Motion for Reconsideration was denied by the Trial Court. The Court opined that Kim, supra. is inapplicable and thus CITI did not have to record its interest prior to the Sheriffs sale. [Exhibit 5, Transc. pp. 13-15]

LEGAL ANALYSIS I. FORECLOSING PARTIES MUST STRICTLY ADHERE TO STATUTORY MANDATES In Reid v. Rylander, 270 Mich 263 (1935), the Michigan Supreme Court clearly ruled that a mortgagor may hold over after sale, and, after expiration of the redemption period, challenge the validity of the sale as a defense to the claim for possession; particularly when the invalidity is alleged to have occurred in the sale procedure. See, also Man. Han. Mtg. Co. v. Snell, 142 Mich App 548 (1985) at 553-554. The Reid Court clearly established the standard/burden of proof in such proceedings where the Plaintiff seeks possession following an allegedly defective foreclosure sale by advertisement: The burden was on Appellee to establish his right to possession, and this required evidence of compliance with every statutory provision relative to foreclosure by advertisement. Id at 267 This is consistent with the requirement that a mortgagee seeking to foreclose a mortgage containing a power of sale by advertisement [an ex parte statutory proceeding] must proceed strictly in accordance with the statutory requirements. Massella v. Besson, 359 Mich 512 (1960); Dohm v. Haskin, 88 Mich 144 (1891); Lee v. Mason, 10 Mich 403 (1862). II. THE FORECLOSING PARTY WAS ABN, NOT CITI, AND ABN VIOLATED MCL 600.3204(d)(1) MCL 600.3204 states in pertinent part: (1) Subject to subsection (4), a party may foreclose a mortgage by advertisement if all of the following circumstances exist: (emphasis added) (d) The party foreclosing the mortgage is either the owner of the indebtedness or of an interest in the indebtedness secured by the mortgage or the servicing agent of the mortgage; As stated previously, the District Courts initial Order granting Plaintiff-Appellants Motion for Summary Disposition (and denying Defendants-Appellants Motion for same) 4 was premised in large measure on the Courts belief that CITI was the foreclosing party.

[Exhibit 5, Transc. p. 5] This decision flies in the face of the obvious and begs the obvious question. How do you determine which entity was the foreclosing party? Appellants asserted then and assert now the only metric available is what entity is identified in the advertisements of foreclosure. A review of same [Exhibit 2] reveals CITI to be conspicuously absent. MCL 600.3204(1)(d) is very specific. Since ABN was the foreclosing party it must have been either the owner of the indebtedness or of an interest in the indebtedness secured by the mortgage or the servicing agent of the mortgage. At the time ABN commenced foreclosure (12/17/10) by advertisement, it did not exist. [Exhibits 3-4] Thus, the District courts initial decision to grant Judgment in favor of PlaintiffAppellee hinged on a gross factual error. Clearly, at the time it commenced foreclosure ABN did not own the indebtedness, have an interest in the indebtedness secured by the mortgage and of course was not the servicing agent of the mortgage. Accordingly, the advertisements (of foreclosure) did not comport with the dictates of MCL 600.3204(1)(d). III. CITI DID NOT RECORD ITS INTEREST PRIOR TO THE SHERIFFS SALE AND THUS VIOLATED MCL 600.3204(3) MCL 600.3404(3) states in pertinent part: 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. Appellants argument in their Motion for Reconsideration was a natural outcome of (1) the District Courts initial (flawed) finding that CITI was the foreclosing party; and (2) 5 the decision rendered in Kim v JP Morgan Chase Bank, [published January 12, 2012].

[Exhibit 6] In its response to Appellants Motion for Reconsideration the Appellee insisted that CITI did not have to record its interest because it acquired the loan via merger (i.e. by operation of law). [Exhibit 5, Trans. Pp. 10-13] The District Court agreed with Appellees position. In Kim, supra., JP Morgan Chase Bank maintained it did not have to record its interest in the mortgage/loan prior to the Sheriffs sale because it acquired its interest by operation of law, specifically via purchasing (through the FDIC) assets previously held by the (then seized and bankrupt) Washington Mutual Bank. Per the Court in Kim, supra., the unambiguous language of MCL 600.3204(3) mandating that an assignment be recorded prior to Sheriffs sale, did not provide a loan acquiring party an exemption from the plain language of the statute (i.e. an exemption if the mortgage/loan was obtained by operation of law). In unequivocal terms the Court stated as follows:
Defendant argues that the recording provision of MCL 600.3204(3)

is inapplicable because it acquired its interest in the mortgage by operation of law. The trial court granted summary disposition in defendants favor on this basis. MCL 600.3204(3), however, makes no exception for mortgage interests acquired by operation of law. A court must not judicially legislate by adding into a statute provisions that the Legislature did not include. In re Wayne Co Prosecutor, 232 Mich App 482, 486; 591 NW2d 359 (1998). (emphasis added) If, as the District Court held, that CITI was the foreclosing party (via its preforeclosure acquisition of ABN), it cannot be maintained it recorded its interest prior to the Sheriffs sale. Accordingly it violated MCL 600.3204(3) rendering the the foreclosure void ab initio. The Michigan Court of Appeals decision in Kim, supra. is instructive in many ways, especially the Courts refusal to add language to the statute. Its worthwhile to consider 6 how/in what manner one entity acquires the ability to foreclose in Michigan. The answer

is that there exists only 3 pertinent means: (1) by way of assignment; (2) by acquisition (as in the facts submitted in Kim, supra. via from the FDIC); or (3) by operation of law (via merger). To suggest that acquiring a loan via merger is not an acquisition which is by operation of law is ludicrous. Such an acquisition cannot be characterized in any other fashion, and most certainly is not an acquisition by way of assignment or purchase. The bottom line is this: whether an entity acquires a loan/mortgage by way of Assignment, purchase or by way of operation of law, it must record its interest prior to a Sheriffs sale for said sale to be lawful. Insofar as CITI did not record its interest prior to the Sheriffs sale, [Exhibit 7] it was not statutorily authorized to proceed with the sale. RELIEF REQUESTED Accordingly Defendants-Appellants Patrick and Carolyn McEnhill respectfully ask this honorable Court to overturn the trial courts granting of Plaintiffs Motion for Entry of Judgment as a matter of law and set aside the Sheriffs sale. Respectfully Submitted,

. Keith G. Tatarelli (P41725) Attorney for Appellants 1800 Crooks, Ste. C Troy, MI 48084 (248) 220-7140 / (810) 338-6361 ktatarelli@hometeamlaw.com

7 STATE OF MICHIGAN

IN THE CIRCUIT COURT FOR THE COUNTY OF WAYNE FEDERAL HOME LOAN MORTGAGE CORP, Plaintiff/Appellee, v Case No. 12-004097-AV Hon. Jeanne Stempien Lower Ct. Case No.: 11 F3556 Hon. Michael K. McNally PATRICK J. MCENHILL and CAROLYN F. MCENHILL Defendants/Appellants. ________________________________________________________________________ Rana Razzaque (P67627) Keith G. Tatarelli (P41725) Trott & Trott, P.C. Attorney for Defendants/Appellants Attorney for Plaintiff/Appellee 1800 Crooks, Ste. C 31440 Northwestern, Ste. 200 Troy, MI 48084 Farmington Hills, MI 48334 (810) 338-6361 or (248) 220-7140 (248) 723-6452 ________________________________________________________________________ Proof of Service I Hereby Certify that on Thursday, May 17, 2012 I served Plaintiff/Appellees Counsel (via FIRST CLASS mail) one copy of Defendants/Appellants Appellate Brief and Index of Exhibits. Respectfully Submitted,

. Keith G. Tatarelli (P41725) Attorney for Appellants 1800 Crooks, Ste. C Troy, MI 48084 (248) 220-7140 / (810) 338-6361 ktatarelli@hometeamlaw.com 8 INDEX OF EXHIBITS Exhibit 1 Order

Exhibit 2 Published Foreclosure by Advertisement(s) Exhibit 3 Certificate of Merger (ABN AMRO Mortgage, Inc. into CitiMortgage, Inc.) Exhibit 4 ABNs Certificate of Withdrawal and Application for Certificate of Withdrawal (filed with MI Dept. of Labor & Economic Growth) Exhibit 5 Transcript (Motion for Reconsideration Hearing, March 13, 2012) Exhibit 6 Kim v JPMorgan Chase Bank Exhibit 7 Wayne Co. property record (pre and post Sheriffs sale)