CitiMortgage's Equitable Subrogation ruling applies retroactively

In an unpublished opinion dated July 31, 2012, the Michigan Court of Appeals ruled in National City Mortgage v Mercantile Bank that the equitable subrogation ruling in CitiMortgage Inc v Mortgage Electronic Registration Systems, Inc, 295 Mich App 72, 76-77; 813 NW2d 332 (2011).

In CitiMortgate, the Court ruled that Ameriquest Mtg Co v Alton, 273 Mich App 84, 731 NW2d99 (2006) was no longer controlling because the recording statute was amended in 2008. What made Ameriquest no longer controlling was the change in the law, which happened two years before CitiMortgage was filed. CitiMortgage is now the leading equitable subrogation case in Michigan and stands for the proposition that a mortgage lender is not a mere volunteer if it pays off it's own earlier mortgage during a refinance and can take the earlier priority date for the later mortgage, even if there were other mortgages recorded in between.

Because CitiMortgage did not establish a new principle of law, but merely utilized Restatement Property, 3d, Mortgages, § 7.3, at 472–473 to clarify the existing law, it can be applied retroactive to the decision.

Gallagher Law Firm attorneys often deal with equitable mortgages in real property and title insurance disputes. If you would like to speak with a Gallagher Law Firm attorney, please contact us.