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In Williams v. WMC Mortgage Corp., No. 05-73356, 2006 WL 2844128 (E.D. Mich. Sept. 29, 2006), a federal district court in Michigan ordered the parties to arbitrate a mortgage payment dispute.
Williams made a lump sum mortgage payment to Defendants with the understanding that he could restore a lower monthly mortgage payment. When Defendants refused to reduce Williams’ monthly payment, Williams sued. The Defendants moved to compel arbitration. The Court granted Defendants’ motion and ordered the parties to arbitrate the dispute.
In opposing the motion, Williams argued that his lawsuit fell within the arbitration agreement’s exception for “any judicial or non-judicial foreclosure proceeding” because “threats of foreclosure” were the basis of his complaint. The Court disagreed, finding the claims to be based largely on breach of contract and statutory grounds. Therefore, the exception did not apply.
Williams also argued that the arbitration agreement was an unconscionable contract of adhesion and therefore unenforceable. The Court rejected this argument because there was no evidence that Williams “had no meaningful choice with regard to loan providers.”
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