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Home / Case Digests / WDNY — Defective Recording of a Mortgage: In re Barbara Sheppard

WDNY — Defective Recording of a Mortgage: In re Barbara Sheppard

U.S. District Court, WDNY

Defective Recording of a Mortgage

Lis Pendens — Bona Fide Purchaser

In re Barbara Sheppard
09-11017 B
Judge Bucki

 

Background: After receiving a duly executed mortgage on the debtor’s real property, the defendant Countrywide Home Loans Inc. mistakenly recorded an unsigned copy of that same instrument. At the closing, the debtor had initialed every page of two copies of the mortgage, but only signed one. A notary public signed attestations that the debtor had executed both copies of the mortgage. The trustee sought to void the mortgage. At issue is the enforceability of the mortgage and the effect of a lis pendens on its enforceability.

Ruling: The court granted Countrywide’s motion for summary judgment. The court found that, despite the initials on the unexecuted mortgage document, the debtor was required to sign the document. It was therefore void as against a bona fide purchaser of the property, i.e. the trustee. However, Countrywide had filed a lis pendens that also included notice to correct Countrywide’s defect. Such notice precluded the trustee from acquiring the status as bona fide purchaser.

Mark S. Wallach of Penney, Maier & Wallach for the plaintiff/trustee; Bruce S. Zeftel for the defendant Countrywide Home Loans Inc.