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My Mother Passed Leaving Me a House in Arrears

Question:

Michael,

My mom signed the note and mortgage with ABC Bank, and then she passed away leaving me the house, with a mortgage in arrears. I recently was served on behalf of my mother at the house by a Bank called QRST BANK as Trustee for the F-0419 SERIES. I don’t know who they are, but I am concerned. Can Loan Lawyers help me keep my home even though this QRST Bank is coming after my mom for an alleged default on her mortgage?

Signed,

Jerry

Answer:

Jerry,

The answer is Yes! Loan Lawyers certainly can help.

Let’s first learn a little bit: Article 9 of Florida's Uniform Commercial Code governing secured transactions is contained in Chapter 679, Florida Statutes. Generally, Chapter 679 “does not apply to the creation of” a real property mortgage. § 679.1091, Fla. Stat. Ann., UCC cmt. 7 (West 2008); see also § 679.1091(3)(k), Fla. Stat. (2008). However, if, as occurred in this case, the note in a mortgage transaction is sold or assigned, Chapter 679 applies to the security interest created in favor of the purchaser or assignee of the note. As Comment 7 to section 679.1091 explains:

O borrows $10,000 from M and secures its repayment obligation, evidenced by a promissory note, by granting to M a mortgage on O's land. [Article 9] does not apply to the creation of the real-property mortgage. However, if M sells the promissory note to X or gives a security interest in the note to secure M's own obligation to X, [Article 9] applies to the security interest thereby created in favor of X. The security interest in the promissory note is covered by [Article 9] even though the note is secured by a real-property mortgage.

See. HSBC Bank USA, N.A. v. Perez, No. 4D13-3193, 2015 WL 2078683, at *2 (Fla. Dist. Ct. App. May 6, 2015).