4th Quarter Commercial Corner-The Recording and Perfecting of a Lost Mortgage by Affidavit

While the recording of Lost Document or Lost Mortgage Affidavits has been a long standing practice, when such an original document appears to have been lost between execution and the intended recording, Case Law and Bankruptcy Trustee challenges have left a lack of clarity as to the validity, enforceability and priority of such Affidavits.  But, after a great deal of hard work spearheaded by the Michigan Land Title Association, the Michigan Legislature recently (finally) passed a series of laws (Public Acts 347, 348 and 349 of 2014), resulting in revisions to MCL 565.201(6) and MCL 565.451a.

The statutes set forth requirements for the contents of such Affidavits which must be followed, including a statement by the affiant that “to the best of the affiant’s knowledge, the original mortgage was delivered from the mortgagor to the mortgagee.”  Additionally, the affiant must state that he/she either mailed a copy of the affidavit and unrecorded mortgage by first-class mail or registered mail, return receipt requested, to the mortgagor at their last known address, or personally served a copy of said documents on the mortgagor.

These statutes, designed to eliminate ambiguities and confusion regarding such recorded documents, are retroactive, and apply to mortgages already recorded in this manner.  This serves to codify common practices and should result in fewer title claims and more security for mortgage lenders.  Congratulations to the MLTA and all who were involved with this effort.