Real Cases in Real Estate By Andrea Lee Negroni, Esq. – February 22d, 2012 Update

Real Cases in Real Estate By Andrea Lee Negroni, Esq. – February 22d, 2012 Update

Real Cases in Real Estate is a weekly update on real estate law, with legal principles illustrated and explained by lawsuits from around the country. The topics are wide-ranging for appeal to a broad spectrum of readers including lawyers, homeowners, investors and the general public. Andrea Lee Negroni, a Washington DC attorney and legal writer with 25 years of experience in financial services and mortgage law, contributes the case summaries.

Followers of Real Cases in Real Estate will learn and be entertained by lawsuits involving nuisance, trespass, zoning violations, deed restrictions, title insurance, public utilities, mechanics liens, construction defects, adverse possession, foreclosure and eviction, divorce and marital property rights, tenants' rights, and more. Real Cases in Real Estate uncovers the unpredictable, amusing, and sometimes outrageous disputes between next-door neighbors, contractors and homeowners, condo boards and residents, real estate brokers and homebuyers, and zoning administrators and developers.

Each fully cited case summary highlights the essential law of the case and explains the principal legal theories and concepts relevant to the outcome. Plain language treatment makes Real Cases in Real Estate accessible to lawyers and laymen alike.

Whether you follow real estate law professionally or as a hobby, you'll find something new and useful every week in Real Cases in Real Estate.

Updates for the Week of February 22d, 2012

Lender cannot acquire a security interest in husband's one-half undivided interest in property if wife mortgaged the property by introducing a forgery into the chain of title.

The Brocks took out a home loan to buy a residence in Suwanee, Georgia in 1987. Jerry Brock gave his wife money each month to make the mortgage payments, but she didn't always make the payments. As a result, the loan went into default several times and the lender filed foreclosure notices. Joyce avoided foreclosure once by borrowing money from a friend to bring the loan current, and another time by working out a payment plan with the lender. When she defaulted under the payment plan, she sought out a mortgage broker to refinance the mortgage, but did not tell her husband Jerry about the refinance. She got the refinance loan by presenting a quitclaim deed from Jerry to her, with a forged signature.

When Jerry learned his wife had spent more than $200,000 without his knowledge, he filed for divorce. That's when he learned about the foreclosure proceedings, the forged quitclaim deed and Joyce's refinance loan. Jerry Brock sued his ex-wife and the refinancing lender to quiet title to the property. The lender claimed it had a security interest in the entire property, based on its status as a bona fide purchaser for value. Generally speaking, "a bona fide purchaser for value is protected against outstanding interests in land of which the purchaser has no notice."

Tenants in common may convey their interests in property without the consent of the other tenants, but "one holding property with another person as tenants in common cannot convey or affect that person's interest without his or her consent." Thus, Joyce could encumber her own one-half interest in the property without Jerry, but she could not encumber his one-half interest. Since a forged deed is a "nullity," even a bona fide purchaser for value cannot acquire good title based on a forged deed. Therefore, even if the lender making the refinance loan to Joyce had no notice of the forged quitclaim deed, it could not acquire an interest in Jerry's half-interest because of the forgery.

Brock v. Yale Mortgage Corp., 287 Ga. 849, 2010 Ga. LEXIS 647 (Ga. 2010) [enhanced version available to subscribers].

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