As seen in the Legal League Quarterly, Spring 2013: Condominium Law Update Get up to speed with Michigan's latest condo rules and regs. By Charlie Hahn Excerpt: It appears that the continued legal wrangling in Michigan between mortgage servicers and condominium associations may be coming to an end. Ever since a controversial trial court decision in 2005, the Condominium Bar has been promoting an interpretation of the Condominium Act that claims that an assignment of the first mortgage after the recording of an association lien results in the mortgage losing its priority, Greenbrooke vs. Hubble & Midfirst Bank, Oakland County No. 12-2005 (11-2-05). This claim was based on the assertion that an assignment was a “conveyance” of an interest in the unit, thus triggering section 211 (MCL 559.211), which requires a fee payoff request to the association.

1. 10 Legal League Quarterly
States: Michigan
Condominium Law Update
Get up to speed with Michigan’s latest
condo rules and regs.
By: Charlie Hahn, Trott & Trott
It appears that the continued legal wrangling
in Michigan between mortgage servicers and
condominium associations may be coming to
an end. Ever since a controversial trial court
decision in 2005, the Condominium Bar has
been promoting an interpretation of the Con-
dominium Act that claims that an assignment
of the first mortgage after the recording of an
association lien results in the mortgage losing
its priority, Greenbrooke vs. Hubble & Midfirst
Bank, Oakland County No. 12-2005 (11-2-05).
This claim was based on the assertion that an
assignment was a “conveyance” of an interest
in the unit, thus triggering section 211 (MCL
559.211), which requires a fee payoff request to
the association. Those who disputed this conclu-
sion pointed out that such an interpretation
ignores (or at least contradicts) clearly stated
language found in other relevant provisions of
the act, most notably Sections 211 and 158.
The intended effects of this theory were
clear: to disrupt the foreclosure of the first mort-
gage by causing it to fail to extinguish the junior
condominium lien and subsequently subjecting
the mortgagee to all past unpaid assessments,
late fees, and condominium attorney fees.
Unfortunately, this seemingly tenuous legal
theory was given additional creditability by the
decision of most title insurers to refuse to insure
over the junior condominium lien when the first
mortgage was foreclosed. This unresolved legal
tension led to a number of trial court battles.
Despite the fact that a significant majority of
the decisions found in favor of the assignee of
the first mortgage maintaining its priority posi-
tion, the litigious back-and-forth continued.
After years of debate, the issue was heard
by the Court of Appeals on October 10, 2012,
and a published decision was issued on Oc-
tober 25, 2012, Coventry Parkhomes Condo-
minium Assoc. vs. Federal National Mortgage
Association, _____ Mich. App._____, No.
304188 (10-25-2012); reconsideration denied
12-18-12. The Court of Appeals did not agree
with the association and upheld normal “race-
notice” principles. The strongly worded deci-
sion states that there is nothing in the Condo-
minium Act that could/should be interpreted
to change the longstanding principal that an
assignee stands in the shoes of the assignor.
During oral arguments, the court displayed
little sympathy for the association’s arguments,
going so far as to make it clear that, in the opin-
ion of the court, such an idea could inject an
element of chaos into the mortgage market.
While this decision resolves what has been a
nagging problem for the mortgage industry—and,
in the process, promises to eliminate hundreds
of thousands of dollars in improper association
charges— other issues continue to generate
similar discussion and debate. One of the most
noteworthy of these is the issue of precisely when
a sheriff’s deed vests its title. While that question
has been consistently answered by dozens of
published opinions over the century and a half
(and was recently restated in In re Receivership
of 11910 South Franklin Rd. 492 Mich. 208, 821
NW2d 503 (7-30-12)), some members of the
Condominium Bar continue to argue otherwise.
Charles L. Hahn serves as a senior litigation
attorney for Trott & Trott, P.C., one of the nation’s
premier law firms conducting residential default
procedures and applying foreclosure avoidance
solution. Contact Hahn at chahn@trottlaw.com.
2. In a series of related cases involving sev-
eral mortgages encumbering numerous invest-
ment properties, a lender seized rents under the
assignment of rents and leases in the mortgages.
The borrowers interfered and threatened at least
one tenant, so a Petition for Preliminary Injunc-
tion was filed, which was granted by agreement
of the parties. Despite the Injunction to which
the borrowers had consented and which required
that rent be turned over to the lender, the bor-
rowers continued to interfere with rent flow and
pocket the rent. It took two subsequent petitions
(both seeking sanctions) and several evidentiary
hearings for the Motions judge to issue an Order
finding the borrowers in contempt of court;
awarding attorneys’ fees to the lender; ordering
the turnover of improperly withheld rents; and
imposing a per diem interest penalty. Notwith-
standing that Order, the borrowers (consistent
with prior actions) did not comply. Consequently,
the lender filed a fourth petition, seeking a bench
warrant. Though a bench warrant was not issued,
the Motions judge expressed his annoyance and
dissatisfaction with the borrowers on the record
at an evidentiary hearing and issued an Order
giving the borrowers 30 more days to comply
with his nearly nine-month-old contempt Order.
Around the last day, the borrowers finally paid
the monetary sanctions, but not the interest pen-
alty required by the contempt Order. Addition-
ally, during the course of those cases, one of the
borrowers filed a Chapter 13 bankruptcy, which
was frivolous. Not only did Debtor’s Schedules
contain misrepresentations, but subsequent
filings were not completely truthful. On the lend-
er’s Rule 11/9011 motion for sanctions, relying
primarily on Section 105(a) of the Bankruptcy
Code, and after a hearing on the merits involving
the Chapter 13 trustee, the bankruptcy judge,
inter alia, barred the debtor from re-filing for six
months. Though the lender had the right to also
file a Petition for Appointment of Receiver, the
lender opted not to do so at the time of referral.
It is believed that appointment of a receiver
would not have changed the borrowers’ conduct
and a receiver would have experienced the same
chicanery. However, a significant advantage
to a receiver is that it becomes the receiver’s
responsibility, not the lender/servicer’s, to handle
property management. The lender/servicer would
still likely have the headache of paying for a
receiver and, thus, the lender/servicer should just
assume the worst when authorizing a Petition
for Appointment of Receiver: That even if the
receivership Order directs borrowers to pay for a
receiver, they are not going to comply.
3. In a post-sheriff’s deed ejectment (evic-
tion) case, the borrowers filed a motion to stay
lockout, falsely claiming that a lockout occurred.
The hearing was continued three times and, each
time, the borrowers raised different theories as
to why lockout should be stayed. At the third
hearing, the borrowers claimed that the loan had
been satisfied before sheriff’s sale by the borrow-
ers’ aunt right before she had died. Despite the
lender’s argument that such a claim should have
been raised in the foreclosure action and not in a
subsequent ejectment action, the Motions judge
continued the third hearing for the borrowers
to assemble and submit evidence of the payoff.
At the fourth hearing, only one of the borrowers
appeared and he attempted to outright avoid dis-
cussing the issue of the payoff. When pressed by
the Motions judge, the borrower finally conceded
that there never was a payoff. Upon request of
the lender’s counsel for a provision in the Court’s
Order barring both borrowers from filing any
further motions or petitions to postpone or stay
lockout, the Motions judge initially declined from
including such bar; however, the borrower con-
tinued to spar verbally with the judge and never
apologized for misrepresenting a material fact to
him. This not only angered the Motions judge,
resulting in a public on-the-record admonish-
ment that the borrowers had “wasted his time,”
but also caused the Motions judge to reverse his
thinking, as he ended up including the re-filing
bar. The Motions judge also warned the borrower
on the record that any further motions or peti-
tions would result in more severe sanctions.
Therefore, under the right set of facts,
lenders/servicers can obtain at least a verbal
reprimand or, at best, sanctions (monetary or
otherwise) for unlawful and/or inappropriate con-
duct in a civil case. Sanctions, in particular, can
require several motions or petitions and hearings
(and are likely appealable in many jurisdictions).
However, persistence, an aggressive ap-
proach, and reliance on local counsel’s expertise
as to when you should fight the good fight can
result in tactical advantages, such as:
» favorable court orders that serve as
precedent;
» heightened settlement leverage;
» re-filing bars that can preclude the
filing of further dilatory motions and/or
petitions, which cost time and money
to defend; and
» a message to borrowers, judges, and the
defense bar that lenders/servicers are
not afraid to be vigilant and willing to
enforce their rights in the face of bad
conduct.
In fact, the last point above is especially
important, as there are individuals in the judi-
ciary and defense bar who believe that lenders/
servicers will generally just turn a blind eye to
misbehavior in order to minimize attorneys’ fees,
court costs, and headline risks. However, by
not taking any action or counteraction, lenders/
servicers arguably become enablers to bad apple
borrowers and engender a culture of misbehavior.
Thus, we should not be completely shocked
when borrowers, with or without counsel,
intentionally run afoul of the law and push the
envelope to see what they can “get away with.”
“Borrowers Behaving Badly” continued from page 1

2. 14 Legal League Quarterly
THE MISSION OF THE LEGAL LEAGUE 100 IS TO PROVIDE A COMMUNICATION PLATFORM FOR INFORMATION EXCHANGE WHILE FACILITATING
STRATEGIC BUSINESS-RELATIONSHIP DEVELOPMENT OPPORTUNITIES TO ITS MEMBERS AND THE MORTGAGE SERVICING COMMUNITY.
THIS SEASON’S PREMIER ATTORNEY LINE-UP
ALABAMA
Dumas & McPhail, LLC
www.dumasmcphail.com
Jauregui & Lindsey, LLC
www.jandllawfirm.com
McCalla Raymer, LLC
www.mccallaraymer.com
ARIZONA
Houser & Allison, APC
www.houser-law.com
Law Offices of Les Zieve
www.zievelaw.com
ARKANSAS
Dyke, Henry, Goldsholl & Winzerling, LLP
www.dhgw.net
CALIFORNIA
Barrett Daffin Frappier Treder
& Weiss, LLP
626.915.5714
Jackson & Associates, Inc.
www.jandalegal.com
Pite Duncan, LLP
www.piteduncan.com
Rosenthal, Withem and Zeff
www.rosenthalzeff.com
COLORADO
Aronowitz & Mecklenburg, LLP
303.813.1177
Castle Stawiarski, LLC
303.865.1400
CONNECTICUT
Bendett & McHugh, P.C.
www.bendett-mchugh.com
Witherspoon Law Offices
www.witherspoonlawoffices.com
FLORIDA
Choice Legal Group, P.A.
www.marshallwatson.com
Gilbert Garcia Group, P.A.
813.638.8920
Kahane & Associates, P.A.
www.kahaneandassociates.com
Van Ness Law Firm, P.A.
www.vanlawfl.com
GEORGIA
Morris Hardwick Schneider
www.closingsource.net
Richard B. Maner, P.C.
www.rbmlegal.com
Rubin Lublin, LLC
www.rubinlublin.com
ILLINOIS
Codilis & Associates, P.C.
www.codilis.com
Freedman Anselmo & Lindberg, LLC
www.falrlaw.com
Pierce & Associates, P.C.
www.atty-pierce.com
The Wirbicki Law Group
www.wirbickilaw.com
INDIANA
Doyle Legal Corporation, P.C.
www.doylelegal.com
Unterberg & Associates, P.C.
219.736.5579
HAWAII
The Mortgage Law Firm
858.740.0442
IOWA
Dunakey & Klatt, P.C.
www.dunakeyandklatt.com
KENTUCKY
Christopher M. Hill & Associates, PSC
www.hillslaw.com
Lerner, Sampson & Rothfuss
www.lsrlaw.com
Nielson & Sherry, PSC
www.nsattorneys.com
LOUISIANA
Dean Morris, LLP
318.388.1440
MARYLAND
Covahey, Boozer, Devan & Dore, P.A.
443.541.8600
Rosenberg & Associates, LLC
www.rosenberg-assoc.com
The Fisher Law Group, PLLC
www.first-legal.com
MASSACHUSETTS
Ablitt Scofield, P.C.
www.acdlaw.com
Doonan, Graves & Longoria, LLC
www.dgandl.com
Guaetta & Benson, LLC
www.guaettabenson.com
Marinosci Law Group, P.C.
www.mlg-defaultlaw.com
MICHIGAN
Fabrizio & Brook, P.C.
www.fabriziobrook.com
Potestivo & Associates, P.C.
www.potestivolaw.com
Schneiderman & Sherman, P.C.
www.sspclegal.com
Trott & Trott, P.C.
www.trottlaw.com
MINNESOTA
Shapiro & Zielke, LLP
www.zielkeattorneys.com
Wilford, Geske & Cook, P.A.
www.wgcmn.com
MISSISSIPPI
Adams & Edens, P.A. *
www.aelawyers.com
MISSOURI
Kozeny & McCubbin, L.C.
www.km-law.com
Martin, Leigh, Laws & Fritzlen, P.C.
www.mllfpc.com
Millsap & Singer, LLC
www.msfirm.com
South & Associates, P.C.
www.southlaw.com
NEBRASKA
Eric H. Lindquist, P.C., LLO
www.elindquistlaw.com
NEVADA
The Cooper Castle Law Firm, LLP
www.ccfirm.com
Malcolm Cisneros
www.mclaw.org
NEW JERSEY
Fein, Such, Kahn & Shepard, P.C.
www.feinsuch.com
Kivitz McKeever Lee, P.C.
www.kmllawgroup.com
Phelan Hallinan & Diamond, P.C.
www.fedphe.com
Stern & Eisenberg, P. C.
www.sterneisenberg.com
NEW YORK
Davidson Fink LLP
www.davidsonfink.com
Kozeny, McCubbin & Katz, LLP
www.katz-law.com
Rosicki, Rosicki & Associates, P.C.
www.rosicki.com
Stein, Wiener & Roth, LLP
516.742.6161
NORTH CAROLINA
Hutchens, Senter, Kellam & Pettit, P.A.
www.hsbfirm.com
Rogers Townsend & Thomas, P.C.
www.rtt-law.com
Shapiro and Ingle, LLP
www.shapiroattorneys.com/nc
The Hunoval Law Firm, PLLC
www.hunovallaw.com
OHIO
Carlisle, McNellie, Rini, Kramer &
Ulrich Co., LPA
www.carlisle-law.com
Laurito & Laurito, LLC
www.lauritoandlaurito.com
The Law Offices of John D. Clunk Co., LPA
www.johndclunk.com
Reimer,Arnovitz,Chernek&Jeffrey
Co.,LPA
www.reimerlaw.com
Reisenfeld & Associates, LPA, LLC
www.reisenfeldlawfirm.com
Weltman, Weinberg & Reis Co., LPA
www.realestatedefaultgroup.com
OKLAHOMA
Baer, Timberlake, Coulson & Cates
405.842.7722
Lamun Mock Cunnyngham & Davis
405.840.5900
PENNSYLVANIA
Kerns Pearlstine Onorato & Hladik, LLP
www.kernslaw.com
KML Law Group, P.C.
www.kmllawgroup.com
Martha E. Von Rosenstiel, PC
www.mvrlaw.com
Richard M. Squire & Associates, LLC
www.squirelaw.com
SOUTH CAROLINA
Brock & Scott, PLLC
www.brockandscott.com
Finkel Law Firm, LLC
www.finkellaw.com
The Hunoval Law Firm, PLLC
www.hunovallaw.com
Rogers Townsend & Thomas P.C.
www.rtt-law.com
TENNESSEE
McCurdy & Candler, LLC
www.mccurdycandler.com
Shapiro & Kirsch, LLP
www.kirschattorneys.com
Weiss Spicer Cash, PLLC
www.weiss-spicer.com
Wilson & Associates, PLLC
www.wilson-assoc.com
TEXAS
Barrett Daffin Frappier Turner
& Engel, LLP
972.386.5040
Butler & Hosch, P.A.
www.butlerandhosch.com
Hughes, Watters & Askanase, LLP
www.hwa.com
Jack O’Boyle & Associates
www.jackoboyle.com
WEST VIRGINIA
Bailey, Joseph & Slotnick, PLLC
www.wvclosing.com
WISCONSIN
Bass & Moglowsky, S.C.
www.basmog.com
Blommer Peterman, S.C.
www.blommerpeterman.com
O’Dess and Associates, S.C.
www.odesslaw.com
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3. Legal League Quarterly 15
LEGAL LEAGUE 100
ASSOCIATE MEMBERS
abc legal services
633 Yesler Way
Seattle, WA 98104
888.294.0408
abclegal.com
CONTACT
Reid McNair
reid@abclegal.com
affinity consulting
group
11370 66th Street North,
Suite 132
Largo, FL 33773
727.544.5400
www.affinityconsulting.com
CONTACT
Debbie Foster
dfoster@affinityconsulting.com
default-solutions
7723 Tylers Place Blvd., #184
West Chester, OH 45069
513.257.9948
www.def-solutions.com
CONTACT
Elizabeth A. Potter
lpotter@def-solutions.com
emason
4592 Ulmerton Road, Suite 101
Clearwater, FL 33762
866.222.3370
www.emason.biz
CONTACT
Stacie Hawkins
shawkins@emason.biz
Firefly legal, inc.
19150 S. 88th Ave.
Mokena, IL 60448
708.326.1410
www.fireflylegal.com
CONTACT
Jennifer Dlugolecki
jennifer.dlugolecki@fireflylegal.com
Kmc information
systems, l.c./caseaware®
101 W. Argonne Drive
Suite 261
St. Louis, MO 63122
314.961.9587
www.kmcis.com
CONTACT
Daniel R. Cannon
cannondr@kmcis.com
mortgage specialist
international, llc
500 Grapevine Hwy.
Hurst, TX 76054
817.345.4228
www.msionline.com
CONTACT
Jack Bryant
jack.bryant@msionline.com
Phoenix
consulting, llc
31226 North 155th Street
Scottsdale, AZ 85262
480.776.9444
CONTACT
William M. LeRoy
wleroy@esqconcierge.com
Prommis solutions, llc
400 Northridge Road
Suite 700
Atlanta, GA 30350
678.983.7842
www.prommis.com
CONTACTS
Kath Pickering
kath.pickering@prommis.com
ProVest, llc
4520 Seedling Circle
Tampa, FL 33614
813.877.2844, ext. 1424
www.provest.us
CONTACT
Victor Draper
vdraper@provest.com
ndex
31440 Northwestern Hwy., Ste. 300
Farmington Hills, MI 48334
248.432.9005
www.ndexteam.com
CONTACT
Scott Goldstein
sgoldstein@ndexteam.com
us real estate
services (usres)
25520 Commercentre Drive, 2nd
Floor
Lake Forest, CA 92630
949.598.9920
www.usres.com
CONTACT
Angela Hurst
angela.hurst@usres.com

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