Thinking of Buying a New Home? Are You Married? Learn How You Should Take Title…

Q. My wife and I are buying a house this fall. How should we take title?

A. There are different ways spouses can take title to a property:

Joint Tenants with Rights of Survivorship: Both you and your spouse own a 100% indivisible interest in your property.  Should one of you pass away before the other, your interest will automatically pass to the surviving spouse without having to go through the process of probate.

Tenants in Common: You and your spouse own a 50% divisible interest in your property.  At the time of death of either spouse, their interest can be left – by will or trust – to any other party of their choosing.  This type of ownership is quite often utilized by parties that are not married.

Another concern of ownership should be the Homestead right.  Whether or not a spouse is named on the deed, they are nonetheless entitled to a $100,000 interest in the primary residence and are required to sign the deed upon conveyance of the property.  This is a lifetime right, existing even after the passing of the record owner.  A Homestead Right may be terminated by affirmative release by the spouse – the signing of a “Release of Homestead Right” – or by deed.

NH Foreclosures: Foreclosing Bank must show possession of both the Promissory Note and Assignment of Mortgage in order to foreclose.

Belknap Superior Court: A Foreclosing Mortgagee Must Show Possession of Both the Note and an Assignment of Mortgage

On January 20, 2011, New Hampshire’s Belknap County Superior Court issued a ruling and Order on a Motion for Reconsideration of its November 1, 2010 denial of petitioner’s motion for injunction in Miroslav Zecevic v. U.S. Bank National Association, as Trustee, Harmon Law Offices, P.C., Mortgage Lenders Network, USA Inc. d/b/a Lenders Network, Wells Fargo Bank, N.A. d/b/a America’s Servicing Company and GMAC Mortgage, Docket No. 10-E-196. In its Order, the Court granted in part and denied in part Zecevic’s Motion for Reconsideration of its decision on the petitioner’s June 16, 2010 complaint seeking temporary, preliminary, and permanent injunctive relief, and seeking damages against the lender that was attempting to foreclose on his home.

This case is important because it indicates that even though New Hampshire is a non-judicial foreclosure jurisdiction, the county Superior Courts are adopting the view that a foreclosing mortgagee must show possession of both the promissory note and a record Assignment of Mortgage in order to have standing to foreclose a mortgage. While presentation of such evidence is not a requirement to commence foreclosure in New Hampshire, Zecevic indicates that a mortgagor in default may successfully enjoin a foreclosure if the mortgagee is unable to show evidence to a court of competent jurisdiction that it is both the holder of a promissory note and an Assignee of record at the time foreclosure is begun.

In his original complaint, Mr. Zecevic alleged that the servicer of his mortgage failed to respond to his demand for proof that it had credited $45,109.51 in mortgage payments to U.S. Bank National Association. The complaint further alleged that foreclosure was improper, given that U.S. Bank National Association had failed to respond to his demand for proof that it was the holder of the promissory note evidencing his indebtedness under the mortgage loan.

Even though U.S. Bank National Association, as Trustee, was an Assignee of record under an instrument executed by Andrew S. Harmon, Esq. on behalf of MERS, the Court enjoined the foreclosure of Mr. Zecevic’s home, finding that U.S. Bank National Association, as Trustee, “failed to demonstrate that it ha[d] proper standing to foreclose on the petitioner’s property due to missing evidence of the assignments of the underlying promissory note and mortgage.” Citing U.S. Nat’l Ass’n, as Trustee for SG Mortgage Securities Asset Backed Certificates, Series 2006-FRE2 v. Emmanuel, 27 Misc. 3d 1220 (N.Y. App. Div. 2010) [quoting Kluge v. Fugazy, 145 A.D. 2d 537, 538 (N.Y. App. Div. 1988)], the Court clarified its view that “foreclosure of a mortgage may not be brought by one who has no title to it and absent transfer of the debt, the assignment of the mortgage is a nullity.” (emphasis in the original.)

Stating that Mr. Zecevic’s request for production lists a number of documents that speak directly to the foreclosing lender’s standing to conduct a foreclosure, the Court granted Zecevic’s Motion to Compel Production of Documents from U.S. Bank National Association, as Trustee. The Court also granted Zecevic’s Motion to Enter a Final Decree Against Mortgage Lenders Network, USA Inc, d/b/a Lenders Network and GMAC, both of whom had failed to file appearances in the matter. The Court denied the foreclosure attorney’s motion to dismiss and motion to award attorney’s fees.