Title Issues

No statute of limitations bars a claim to set aside a forged deed and subsequent mortgage

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...

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Developer stopped from converting golf course into housing by implied servitude arising out of marketing the golf course as an amenity for nearby homes previously sold by the developer

A developer marketed homes as being next to a golf course with the golf course noted on sales material and the recorded plat. When the developer later tried to convert the golf course into residential lots, the homeowners sued, claiming an implied servitude. Despite the lack of any express covenant in the deeds, the court found the presence of the golf course with the designation as a "golf course" to be sufficient to find the property restricted to golf course purposes. ...

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Colorado Supreme Court holds that an option that can be canceled any time before its exercise does not violate the traditional rule against perpetuities

The Colorado Supreme Court has held that the traditional rule against perpetuities does not invalid an option, even if it has no time limit, if it can be canceled at any time before its exercise, at least where the price for the option is set at the market value of the property and it was agreed to by sophisticated parties. Atlantic Richfield Co. v. Whiting Oil & Gas Corp., 320 P.3d 1179 (Colo. 2014). The court reasoned...

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Third Circuit supports MERS, holds that Pa. law does not require mortgage transfers to be recorded to be valid

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,...

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Postforeclosure judicial process satisfies due process clause

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...

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State did not dispossess owners and thus did not "take' lands in violation of the constitution merely by asserting ownership

The Texas Supreme Court affirmed its ruling that the border between state-owned submerged lands and private lands along the coast is the "mean higher high tide line" or the mean location of the high tide line over the regular tidal cycle of 18.6 years. Porretto v. Tex. Gen. Land Office, 2014 WL 2994436 (Tex. 2014). In various ways, agents of the state of Texas has acted so as to claim public rights in property that is on the "private" or landward side of the line. The Texas General Land Office...

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Massachusetts SJC considers remedies for seller's breach of promise to sell

In K.G.M. Custom Homes, Inc. v. Prosky, 10 N.E.3d 117 (Mass. 2014), the Supreme Judicial Court of the Commonwealth of Massachusetts held that a buyer can choose to seek either specific performance or damages when a seller breaches the promise to sell. The issue was hard because Massachusetts allows only specific performance as a remedy for anticipatory breach and the complaint had alleged only anticipatory breach. Because the issue of actual breach was fully litigated and the court found the...

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Robo-signing mortgage servicer may have violated state false document statute

The Ninth Circuit held that a mortgage servicer that allegedly engaged in robo-signing may well have violated an Arizona statute, Ariz. Rev. Stat. § 33-420, that criminalizes filing false property title documents with the state recording offices. In re Mortg. Electronic Registrations Systems, Inc (Robinson v. Am. Home Mortg. Serv. Inc.), 2014 WL 2611314, 2 014 U.S. App. LEXIS 10934 (9th Cir. 2014). There was  evidence that trustee's sale documents were notarized in blank and...

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Owners who lost title to their homes through nonjudicial foreclosure are entitled to raise defenses to eviction

The Supreme Judicial Court of the Commonwealth of Massachusetts has ruled that owners may make affirmative defenses to eviction claims by banks that acquired title to their property through a private or nonjudicial foreclosure. Bank of America v. Rosa, 466 Mass. 613 (2013). Those defenses may challenge the way in which the bank acquired title to the property through the foreclosure process and and power of the bank to foreclose in the first place. They may also include any equitable defenses...

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