Lost Note not road block to foreclosing mortgage securing established debt

In Sallie v. Fifth Third Bank, a published opinion, the Michigan Court of Appeals held that a bank could foreclose on a mortgage even if the underlying note is lost as long as the mortgage contains a power of sale and the underlying debt is established.

Plaintiff borrowed money from Fifth Third Bank's predecesor as memorialized in a promissory note and secured by a mortgage. Plaintiff stopped payment and the Bank foreclosed on the property, but was unable to produce the note. Plaintiff contested the foreclosure because of the missing note, but the Kent Circuit Court granted summary disposition in favor of the bank. The Court of Appeals affirmed, stating that since the bank produced a valid, recorded mortgage that contained a power of sale, a default of the mortgage occured, the bank established plaintiff's underlying debt and default with clear proof by producing documentary evidence and testimony establishing Plaintiff's payment history and default, and the bank did not seek to recover on the note, the bank was entitled to foreclose on the mortgage despite the loss of the note.