Ignorance of the law is no defense. But how about the facts? How long, for example, can a lender feign ignorance of the facts and collect on a mortgage loan after the underlying debt has been satisfied by a deed in lieu of foreclosure?
The answer: As long as the borrower continues to pay, U.S. District Judge Joseph F. Anderson Jr. held recently in Martin v. American General Finance Inc., a case that aptly depicts the confusion resulting when a note and mortgage go their separate ways.
In 1993, Melinda Martin and her husband bought a three-bedroom house in Winnsboro at a foreclosure sale. In 1996, they took out a mortgage with First Family Financial Services. In 1999 they executed a deed in lieu of foreclosure to First Family, which First Family then filed with the county clerk.
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