Tag: deed of trust

N.C. Court of Appeals: Wells Fargo v. Coleman- Statute of Limitations for Reformation of Deed of Trust is a Factual Determination; Reasonable Diligence not required for Mutual Mistake

Summary:

The Colemans own lots 42, 43, 44, and 45 of a subdivision, with their home located on lots 42 and 43 and lots 44 and 45 being undeveloped. In 2007, Mr. Coleman borrowed $137,567.00 from (now) Wells Fargo, secured by a Deed of Trust signed by the couple. The Deed of Trust described the property as:

All that real property situated in the County of Davidson, State of North Carolina:
Being the same property conveyed to the Grantor by Deed recorded in Book 1007, Page 1013, Davidson County Registry, to which deed reference is hereby made for a more particular description of this property.… Read More

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N.C. Ct. of Appeals: Bank of America v. Charlotte Property Investments- Incorrect Legal Description Insufficient to Defeat Deed of Trust

Summary:

Gathings granted a Deed of Trust to Countrywide, later succeeded by Bank of America. The Deed of Trust included the correct Property Identification Number and physical address, but had an incorrect legal description. The property was subsequently sold at a foreclosure sale for homeowners dues to CPI, which did not discover the Deed of Trust in favor of Bank of America. Bank of America subsequently brought action to quiet title.

Although “[a] deed of trust containing a defective description of the subject property is a defective deed of trust and provides no notice, actual or constructive, under our recordation statutes.” Fifth Third Mortg.… Read More

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N.C. Ct. of App.: Townsend v. Watts- Partition Sale and Affect on Lienholders

Summary:

Siblings, Townsend and Simmons owned real property as tenants in common. Townsend brought suit seeking a partition sale of the property, naming Simmons the lienholder, Citimortgage and the City of Greensboro, as defendants. After the trial court found that due to the size and nature of the property actual partition of the property could not be made without injury to the parties and ordered a partition sale. The property, despite having a tax value of $160,000.00, sold at the partition sale for $2,500.00.

The Court of Appeals upheld the partition sale, finding that the clerk of court had made findings, based on the previous failed sales history, neighboring house values and condition of the property, sufficient to support the $2,500.00 value.… Read More

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N.C. Ct. of App.: Garren v. Watts- Sufficiency of Description of Real Property

Summary:

A quit claim deed, recorded with the Buncombe Register of Deeds on May 14, 2009, was blank as to the legal description and only included the handwritten entry “Parcel #960704498200000.”. On April 29, 2010, a “Affidavit of Correction” was recorded including the legal metes and bounds description.

The Court of Appeals held that the quit claim deed was void as it inadequately described the property, holding that a tax PIN alone was insufficient. The Court distinguished Fisher v. Town of Nags Head, ___ N.C. App. ___, 725 S.E.2d 99 (2012), as there “the description of the [property to be condemned] utilize[d] terms that are well defined in the referenced portion of the Administrative Code, such that a surveyor with experience in oceanfront properties could accurately determine the [property].” and GMAC Mortg., LLC v.… Read More

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Bankr. E.D.N.C.: In re Bradshaw- 11 U.S.C. § 1322(b)(2) Anti-modification inapplicable if Mortgage Takes Escrow Account as Collateral

Summary:

The Debtors principal residence was found to be worth $136,000 with a first mortgage of $116,254.11 held by PNC and a second mortgage, held by Asset Ventures, LLC, in the amount of $27,000. This second mortgage additionally took as collateral the Debtors’ escrow account.

Following In re Bradsher, 427 B.R. 386, 388 (Bankr. M.D.N.C. 2010), the court held that as an escrow account is additional personal property, the anti-modification provisions of 11 U.S.C. § 1322(b)(2) did not apply and allowed the bifurcation of Asset Ventures’ claim, with $19,745.89 secured and unsecured in the amount of $7,254.11.

For a copy of the opinion, please see:

Bradshaw- 11 U.S.C. Read More

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4th Circuit: Scheider v. Deutsche Bank- Assignment of the Note carries with it Assignment of the Mortgage; Choice of Law

Summary:

The Scheiders refinanced their South Carolina home in 2006 with a $1.178 million adjustable rate note payable to Mortgage Network, granting a mortgage securing the note, which provided that MERS would act as the nominee for Mortgage Network. Mortgage Network subsequently transferred the note, with an endorsement that read “Pay to the order of ______ Without Recourse.” , with the blank later being filled with “IndyMac Bank F.S.B.” Indy Mac later endorsed the note in blank, without recourse, and it is currently held by Deutsche Bank. Some of these transfers occurred during the securitization of the note, which was effectuated by a Pooling and Servicing Agreement (“PSA”), governed by New York law, and provided that Indy Mac would deliver to Deutsche Bank an endorsement in blank.… Read More

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E.D.N.C.: Homeward Residential v. First Bank- Failure to Cancel Equity Line

Summary:

In February of 2006, the Coopers granted a Deed of Trust for a home equity line to First Bank. Later, in December of 2006, the Coopers refinanced their home with a Deed of Trust, currently held by Homeward, paying of the equity line to First Bank. The closing attorney at that time requested that First Bank terminate the home equity line, but First Bank instead allowed the Coopers to draw an additional $87,598 before they ultimately filed Chapter 13. Homeward brought an adversary proceeding to have its lien determined to hold seniority over First Bank.

Pursuant to N.C.G.S. § 45-82.2, upon the request of an authorized party to terminate an equity line of credit, the lender shall terminate the borrower’s ability to obtain further advances and, after payment of the account in full, record a satisfaction.… Read More

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N.C. Court of Appeals: Wells Fargo v. Huntley- Purchaser in Foreclosure can seek reformation of Deed of Trust

Summary:

Wells Fargo sought a reformation of a Deed of Trust, which it discover, after the borrowers defaulted and Wells Fargo foreclosed (putatively purchasing the property itself), did not describe the actual real property upon which the house was built. The trial court held that as Wells Fargo, having purchased the property at foreclosure, was no longer a lender and lacked standing as a purchaser to seek reformation.

The Court of Appeals disagreed, following Citifinancial Mortg. Co. v. Gray, 187 N.C. App. 82, 85, 652 S.E.2d 321, 322 (2007), and holding that the purchaser at foreclosure can pursue reformation.

Commentary:

Free advice to the borrowers- Quickly, file bankruptcy and Wells Fargo will be wiped away.… Read More

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N.C. Court of Appeals: Currie v. Poteat- Nunc Pro Tunc and Lis Pendens

Summary:

In February 2003, Currie, serving as the executor for the Estate of Della Brown, brought suit against the Poteats, for conversion of funds which were used to purchase their home, filing a notice of lis pendens on March 13, 2003. This action was subsequently voluntarily dismissed without prejudice in open court on September 7, 2004, so that Currie could be re-qualified as the executor of the estate. On September 8, 2004, the Potent’s attorneys recorded a Deed of Trust against their home, securing the unpaid attorneys’ fees, and transferring a remainder interest to the Potent’s daughter, with a reservation of a life estate.… Read More

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N.C. Court of Appeals: REO Properties v. Smith- Constructive Notice of Lis Pendens

Summary:

In 1986, the Smiths acquired title to Lot #184 of Crestview Subdivision, 106 Crestview Terrace, in Davidson County, Thomasville, North Carolina (“the property”) and recorded the Deed. The Smiths executed a promissory note in the principal amount of $96,000 (“the Note”) to New Century Mortgage Corporation (“New Century”) secured by a Deed of Trust on the property that was recorded on 16 December 2002. The Deed of Trust included the correct address of the property as 106 Crestview Terrace, Thomasville, North Carolina, the legal description attached to the Deed of Trust did not, however, fully and completely describe the property.… Read More

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