Vincent Howard and our Perris foreclosure defense lawyers were interested to see a rare victory for homeowners attempting to avoid foreclosure by arguing their mortgage is invalid. In Marine Credit Union v. Detlefson-Delano, the Minnesota Supreme Court ruled that Anne Detlefson-Delano's mortgage was invalid because her estranged husband, Jack Antonio, had not signed the loan papers when they refinanced. When Detlefson-Delano later defaulted and foreclosure proceedings started, she convinced the trial court that the mortgage was void because Antonio never signed it. The court of appeals reversed, reasoning that Antonio had signed a quitclaim deed before the refinance, but the Minnesota high court ruled that the quitclaim deed didn't explicitly waive his rights.
Antonio is a party to this case but has never participated. Detlefson-Delano originally acquired the home in 1994, when she and her first husband purchased it. She was awarded sole ownership of the property after her divorce, and the property became Antonio's homestead when he married Detlefson-Delano. In 2007, they listed it for sale, and Antonio signed a quitclaim deed in his wife's favor at their real estate agent's suggestion. Antonio, a long-haul trucker, was away from home frequently. But the property never sold, and instead they refinanced with MCU about six months later. MCU was aware of the quitclaim deed and the marriage. Detlefson-Delano said MCU told her Antonio didn't need to be there; the credit union said she led them to believe Antonio had abandoned the family. They have been estranged since 2009, when was also when Detlefson-Delano went into default and the foreclosure began.
The trial court in the foreclosure proceeding found that the quitclaim deed did not waive Antonio's homestead rights. (It also invited MCU to file another proceeding seeking liability from Detlefson-Delano for the note, aside from the mortgage. It has successfully done so.) The court of appeals reversed, however, finding that Antonio retained no homestead interest after the quitclaim deed.
The Minnesota Supreme Court has consistently held that mortgages are void when one spouse did not sign and no exception applies. MCU argued that an exception applies because Antonio's quitclaim deed conveyed both his legal interest in the property and his interest in the homestead. The Minnesota Supreme Court ultimately disagreed, finding no express waiver of Antonio's homestead rights. The mortgage doesn't fall into one of the statutory exceptions; it is not a conveyance between spouses, even if the quitclaim deed was. Nor did the quitclaim deed waive Antonio's homestead, rights, the court found. Minnesotans may waive homestead rights only when they unequivocally intended to do so, and the language of the quitclaim deed doesn't mention homestead rights. Thus, it found no waiver of his rights and voided the mortgage, reversing the appeals court.
Vincent Howard and our Santa Ana foreclosure defense attorneys are interested in the unusual outcome of this case. The credit union has no mortgage on the home but may still go after Detlefson-Delano personally for an unsecured debt. In a way, this is a bad outcome for both parties because the bank is unlikely to be able to collect the money. While Detlefson-Dealano's home can't be foreclosed, she is still liable for the debt and can be sued or have other debt collection action taken. In her situation, one choice might be to declare bankruptcy, because bankruptcy permits debtors to pay less than the full amount of an unsecured debt if they cannot afford to pay the whole thing. Of course, bankruptcy is not an easy decision; it harms your credit for years to come. Mortgage debts can sometimes become unsecured in bankruptcy when the home is deep underwater, but it's not universal. Vincent Howard and our Ontario foreclosure defense lawyers can help you learn more about whether this would be available to you in bankruptcy.
If you believe your lender broke the law when you took out a California mortgage and you'd like to talk to an experienced attorney about your options, don't wait to call Howard Law, P.C. You can reach us through our website or call 1-800-872-5925.