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. Also worth noting the kindness of Wells Fargo in foreclosing on a widow. For a copy of the opinion, please see: Clayton- Surviving Spouse not a Borrower under Reverse Mortgage Note