Mitchell v. Trustees of United States Mutual Real Estate Investment Trust

This action involves a $77,600 non-purchase-money "wraparound” mortgage note made by plaintiffs Mitchell and payable to defendant United States Mutual Real Estate Investment Trust with interest of 11%. The circuit court held that Michigan’s usury statutes had been preempted by federal legislation so that the note was not usurious as a matter of law. We reverse.

On August 21, 1978, plaintiffs borrowed $65,200 from the Bank of Lansing for the construction and purchase of a home. Interest was set at 10%. Under the terms of a 30-year promissory note, payments of $572.46 were to be made monthly.…