In Diem v Sallie Mae Home Loans, Inc., a published Michigan Court of Appeals Opinion, the court considered a challenge to a mortgage foreclosure filed by the mortgagor three days before the redemption period expired.
The court fairly succinctly set forth the elements of a claim challenging a foreclosure sale.
- Fraud or irregularity in the foreclosure proceeding.
- prejudice to the mortgagor.
- a causal relationship between the alleged fraud or irregularity and the alleged prejudice.
The court found that even assuming that the allegations of fraud or irregularity were true, the second and third elements had not been pled. The mortgagor could not state how he had been prejudiced by the defects he alleged in the foreclosure proceedings. Thus, there was no causal relationship.
It is extremely difficult in Michigan to set aside a foreclosure sale. Minor irregularities in the sale procedure, even fraud, will not be sufficient absent some actual prejudice which prevented the mortgagor from being in a better position to protect his interest in the property.