Borkus v. Michigan National Bank

This appeal presents an issue of first impression regarding the authority of a national bank to obtain a second mortgage as security for a real estate loan under the federal and state banking acts as written in 1971.

I

Plaintiff and her former husband owned a single-family residence in Southfield subject to a first mortgage and were buying a parcel of commercial property in Detroit on a land contract. On December 1, 1971, the defendant loaned $25,000 to plaintiff and her former husband to satisfy the balance of the land contract at 7% per annum in advance, or 12.15% per annum in simple…