In a straight-forward application of the relevant recording statute, the Massachusetts Land Court has held that a son who received a deed to the land without notice of a prior reverse mortgage is not subject to the mortgage since it was not recorded and he had no other means to achieve notice of it. https://www.lexisnexis.com/clients/macourts/ 57 N.E.3d 1065 (Mass. App. Ct. 2016).
In Bac Home Loans Servicing, L.P. v. Savankham, 2016 Mass. LCR LEXIS 86 (Mass. Land Ct. 2016), a mother gave a bank a mortgage on her joint tenancy interest in property she shared with her two children. The children did not know about or participate in the transaction. Apparently, the bank thought it was getting a mortgage on the whole property rather than just the joint tenancy interest of one joint tenant and...
Many mortgage agreements allow the lender to change the locks on the door and take over the property when a borrower-mortgagor defaults or abandons the property; this is intended to prevent the property from becoming dilapidated or taken over by squatters. However, some banks have locked owners out of their homes after they default even if they are still living there and there is no evidence of abandonment or harm to the premises.
The Washington Supreme Court outlawed this practice in ...
The California Supreme Court held in Yvanova v. New Century Mortgage Corp.,, 365 P.3d 845 (Cal. 2016), that a borrower has standing to prove that a nonjudicial foreclosure was wrongful because an assignment by which the foreclosing entity purportedly took a beneficial interest was void, thereby depriving the foreclosing party of any authority to foreclose through a trustee's sale.
The Nebraska Supreme Court has joined other courts that have held that a bank that holds the mortgage note may foreclose on the property even if there is no evidence of a valid chain of mortgage assignments and some doubt about whether the foreclosing party has the right to foreclose. Marcuzzo v. Bank of the West, 862 N.W.2d 281 (Neb. 2015). The theory is that the holder of...
The New York Court of Appeals had reaffirmed the traditional rule that forged deeds do not convey title. It has clarified that no statute of limitations bars a challenge to a forged deed even if the purported owner has subsequently transferred interests in the land to a subsequent mortgagee who had no notice of the forgery. Faison v. Lewis, 32 N.E.3d 400 (N.Y. 2015). The Court ruled that the third party purchaser is not a "bona fide...
Pennsylvania statutes have language that might have been interpreted to require transfers of interests in land (through deeds or mortgages) to be recorded to be valid. If true, that would have undermined the MERS system of mortgage registration. But the Third Circuit gave MERS a win and interpreted Pennsylvania law to recognize mortgage transfers at the moment they are signed; recording is not required for the transfer of the property interest to be valid but is simply for the convenience of the parties and subsequent conveyees. The case,...
The Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. § 1692 et seq., regulates the processes by which debts are collected. The Third Circuit has agreed with other courts in holding that the filing of a foreclosure complaint can subject both the plaintiff bank and the lawyers filing the complaint to liability under the FDCPA. In the case of Kaymark v. Bank of America, N.A., 783 F.3d 168 (3d Cir. 2015), the allegation was that the complaint...
The Sixth Circuit has ruled that nonjudicial foreclosure satisfies constitutional due process requirements because the homeowner/borrower was given notice of the foreclosure and notice of who to cure the default or seek a loan modification and how to redeem the property (get it back) after the foreclosure sale during a six-month redemption period. Garcia v. Fed. Nat'l Mortg. Ass'n, 782 F.3d 736 (6th Cir. 2015). These statutory procedures...