4th Circuit: Holliday v. Holliday- Equitable Subrogation of Forged Deed of Trust


Mrs. Holliday primarily asserted that the refinance documents, on which Mr. Holliday allegedly forged her signature in granting a Deed of Trust to Cambridge Home Capital (Cambridge), were void ab initio and thus ineffective to transfer an interest in the Hollidays’ property. The Deed of Trust was ultimately assigned to BAC Home Loans. (BAC.)

The Court of Appeals restated that a “deed obtained through fraud, deceit or trickery is voidable as between the parties thereto, but not as to a bona fide purchaser. A forged deed, on the other hand, is void ab initio.” Harding v. Ja Laur Corp., 315 A.2d 132, 135 (Md. Ct. App. 1974). Under the doctrine of equitable subrogation, however, when an one entity pays a valid obligation for another, equity requires reimbursement to prevent unjust enrichment.” Hill v. Cross Country Settlements, LLC, 936 A.2d 343, 361 (Md. 2007) (internal quotation marks omitted). Here, the refinance paid off a undisputedly valid mortgage entered into by both Mr. and Mrs. Holliday. As such, BAC was entitled to subrogated to the prior mortgage, notwithstanding the alleged forgery.


If BAC is subrogated to the rights of the prior mortgage, is it bound by the terms, such as interest rate, monthly payment, etc., of the prior mortgage?

Mrs. Holliday may also have fared better in a bankruptcy case, with a Trustee seeking to avoid the mortgage. This is particularly true since the property appears to be owned as Tenants by the Entireties and, if it were proven that only Mr. Holliday forged Mrs. Holliday’s signature, the mortgage note would not be entitled to a share in the resulting equity from the bankruptcy estate.

For a copy of the opinion, please see:

Holliday v. Holliday- Equitable Subrogation of Forged Deed of Trust.pdf


1. Bachelor of Arts degree in English Literature from Washington University, 1993. 2. Juris Doctor degree from George Washington University, 1996. Admissions to Practice of Law: North Carolina Bar, 1996. Federal District Courts for the Eastern and Middle Districts of North Carolina. Specialty Certification: North Carolina State Bar: Certified as a Specialist in Consumer Bankruptcy. Areas of Practice: Practice limited to consumer and business debtor bankruptcy law, 1998 to present. Memberships: National Association of Consumer Bankruptcy Attorneys (NACBA). North Carolina Academy of Trial Lawyers (NCATL). North Carolina Bar Association, Bankruptcy Section. Lectures prepared and presented: North Carolina Academy of Trial Lawyers seminar on bankruptcy; Topic: Counseling the Consumer Debtor Prior to Court - C.Y.A. Forms to Help 'Gird They Loins'; 2001. Middle District Bankruptcy Seminar; Topic: Preparing Chapter 13 Plans; 2002. NACBA National Convention; Topic: Efficient Office Practices; 2003. NACBA National Convention; Topic: Chapter 7 vs. Chapter 13 Debates; 2004. Middle District Bankruptcy Seminar; Topic: Chapter 7 & 13 Hot Issues; 2004. Positions held: NACBA National Convention; Convention Chair; 2008. NACBA National Convention; Panel Moderator: Topic: Basic Bankruptcy Issues; 2008. NACBA National Convention; Panel Moderator; Topic: Chapter 13-Disposable Income and Other Issues; 2007. NACBA National Convention; Panel Moderator; Topic: Representing Members of the Military and Their Families; 2007. NACBA, Member of National Board of Directors, 2006 to present. NCATL, Chair of the Bankruptcy Section, 2003 to 2007. NACBA, Chair of the North Carolina Section, 2003 to 2007. NC Bar Association, Bankruptcy Section, Bankruptcy Council Member, 2004 to present.

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