Tuesday, November 09, 2010

Defective Acknowledgements

The November 8, 2010 issue of Massachusetts Lawyers Weekly reports on a bankruptcy case (In re Bower, Case No. 10-10993-WCH) in which the judge allowed the bankruptcy trustee to avoid a previously recorded mortgage on the grounds that the acknowledgement clause of the mortgage had omitted the name of the person signing the document - that being the debtor in the bankruptcy case. The judge reasoned that this omission caused the mortgage to be void and that because the bankruptcy trustee had the same rights as a bona fide purchaser for value, it made no difference that the trustee had actual knowledge of the mortgage - it simply was not binding on him.

The idea that the omitted name voids the mortgage is not new. We wrote about that here back in June 2009. Allowing the bankruptcy trustee to ignore the mortgage entirely seems to take the concept a step farther.

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