In response to a bankruptcy opinion issued last year, the Michigan Legislature has passed Public Acts 347, 348, and 349 of 2014 providing that a full copy of a mortgage can be recorded with an affidavit setting forth the circumstances of the execution of the mortgage. If such an affidavit is recorded, then the mortgage becomes a lien against the property as of the date of recording of the affidavit. The acts specify that they apply to affidavits recorded before the date of the acts as well as affidavits recorded afterward.
Last year a bankruptcy case held that, until an original mortgage is actually recorded, no lien is created against the real property. An affidavit itself does not satisfy the recording requirements. The bankruptcy court allowed a chapter 7 trustee to avoid the mortgage and sell the property to pay a dividend to creditors. The acts are clearly a response to that ruling.