No Surplus Proceeds Unless Mortgage Paid in Full

In Trademark Properties v County of Macomb, an unpublished Michigan Court of Appeals Opinion, The mortgagee submitted an opening bid of $20,572.80 after publishing a foreclosure notice stating that the balance due on the mortgage was $55,030.58.  The successful bid was Trademark Properties, with a bid of $31,572.80.  Trademark also obtained an assignment of the mortgagor’s right to surplus proceeds and then made a claim to the Sheriff for the $11,000 difference between the mortgagee’s opening bid and the final sale price, arguing that the mortgagee’s opening bid extinguished the mortgage and difference between the opening bid and the final bid constituted surplus proceeds under hte foreclosure statute.  The trial court denied the claim.

On appeal, the Michigan Court of Appeals affirmed.  The court held that, under the plain and ordinary meaning of surplus, there is a surplus after a mortgage foreclosure sale only if the entire mortgage balance was satisfied.  Because both the opening bid and the final bid were for less than the balance undisputedly due under the mortgage, there were no surplus proceeds to which Trademark could lay claim.

© Steve Sowell 2017