Thursday, April 16, 2015

Owner’s Loss of Interest in Foreclosed Property While Never Signing the Note

Question: My husband and I are being sued for foreclosure. My husband is not on the loan. He is on the deed because he went with me to the closing and signed some papers. The complaint states that "The secure payment of the Note, [my name] and [my husband’s name] executed a mortgage in favor of Mortgage Electronic Registration Systems, Inc...." Why is my husband being sued if he did not sign on any loan notes? If I don't answer it, will there be a judgement against me as well as my husband by default?

Response: Usually, the person who signs the deed signs the mortgage. What your husband did not sign is the note, which is the contract where the bank lent you money. You are solely responsible for that money. Mortgage is the security instrument that allows the bank to take away the property if you default on your payments under the note. The reason both you and your husband are being sued is because your husband has an interest in the property as the record owner and the bank must cut his interest off by suing him, as well. You should most definitely answer the complaint and you are far away from the deficiency judgment to have to worry about it now. Many banks waive deficiency lawsuits. There are no default judgments in foreclosure cases in New York. By not answering the complaint, the bank can proceed with foreclosure more expeditiously so I would definitely recommend avoiding that and you want to preserve your foreclosure defenses. Your husband should not be pursued for deficiency, if there is one, since he did not sign the note (in accordance with the New York laws).

In the legal blog, Attorney Svetlana Kaplun addresses typical questions our firm has received from our clients, or come across from homeowners related to foreclosure, foreclosure defense, loan modification and bankruptcy topics.

The information contained in the legal blog of Attorney Svetlana Kaplun is for informational purposes only, and should not be construed as a legal advice on any subject matter. Please read our full disclaimer or contact the Law Office of Svetlana Kaplun, P.C. by telephone at 718-444-1115 for more information.
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