Tag: successor in interest

N.C. Court of Appeals: In re Clayton- Surviving Spouse not a Borrower under Reverse Mortgage Note

Summary:

After the death of her Melvin Clayton, Wells Fargo accelerated the reverse mortgage note and sought to foreclose on the residence still owned by Mrs. Clayton. The Court of Appeals held that even though Mrs. Clayton was identified as a “borrower” on the Deed of Trust, Melvin Clayton was “the only contemplated borrower to the reverse-mortgage agreement, as he alone executed [those] documents and was obligated under them.” Mrs. Clayton was, due to her age, ineligible to be a borrower under the reverse mortgage, which, pursuant to N.C.G.S. § 53-257(2), must be 62 years of age or older.

Commentary:

The successor in interest rules under the Dodd-Frank Act would not apply here, as this is a reverse mortgage.… Read More

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N.C. Court of Appeals: In re Clayton- Surviving Spouse not a Borrower under Reverse Mortgage

Summary:

Melvin Clayton obtained a reverse mortgage, granting a Deed of Trust against his home. His wife, Jackie, was ineligible for the reverse mortgage (presumably because she was not old enough), so did not sign the note, but did sign the Deed of Trust. The note included a provision that accelerated the debt upon his death, unless a “surviving borrower” continued to reside in the home. Upon Melvin Clayton’s death, Wells Fargo sought to foreclose.

The Court of Appeals held that as N.C.G.S. § 53-257(2) defines a borrower in a reverse mortgage to be 62 years of age or older, Jackie Clayton was not a “surviving borrower”, the acceleration was proper.… Read More

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