Mortgages

Under Massachusetts Obsolete Mortgage Statute, Mortgage Payable “On Demand” is Enforceable for 35 Years

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The Massachusetts Appeals Court decided last week that a mortgage stating it is payable “on demand,” with no maturity date or term, is governed by the so-called obsolete mortgage statute, M.G.L. c. 260, § 33. The case is Thornton v. Thornton and a link to the decision is here. The obsolete mortgage statute is designed to help remove old mortgages from land titles. It sets a term of 35 years from the mortgage recording date if the mortgage has no term or maturity date, or five years from the end of any stated term or maturity date. The time to enforce a mortgage can be extended by recording an affidavit that the mortgage is not satisfied, among other methods. As the Appeals Court has confirmed in Thornton, the obsolete mortgage statute cannot shorten the term of any mortgage. In this case, the related note did have a maturity date, but there was no reference to

Mass. Appeals Court Rebuffs Mortgagee’s Novel Bid For Equitable Subrogation

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In its decision yesterday in Wells Fargo Bank v. Comeau (pdf), the Massachusetts Appeals Court rejected the plaintiff mortgagee’s attempt to use the doctrine of equitable subrogation in a novel way:  to impose on a surviving wife the obligation to pay a note signed by her late husband where the wife had not signed either the note or the mortgage.

The boiled down facts are as follows.  Husband and wife owned a home as tenants by the entirety.  In 2003 the property was mortgaged to a local bank.  Husband alone signed the note; husband and wife signed the mortgage.  In 2005 husband refinanced with a different bank.  This time husband alone signed both the note and mortgage.  In 2008 husband died, leaving a balance due on the note.  Wells Fargo, successor of the refinancing bank, did not assert a claim against husband’s estate before the statute of limitations expired.  Instead Wells Fargo sued wife, claiming its mortgage should be equitably subrogated to the position