The Hidden Mortgage Loophole
A new judicial ruling surprises attorneys and lenders by declaring that assigned mortgages do not need to be filed on record.
The story, cleaned up
A cleaned-up reading of the newspaper page: spelling and layout repaired, one story lifted off a crowded page. It follows the original closely but it is not a transcription. The original page is below; read it if a detail matters.
Contrary to the legal usage of this county in the past, Judge Moore has decided that the owner of an assigned mortgage need not file his assignment and that its absence of record does not necessarily affect the value of the instrument as a legal document. This decision will be news to the money lender, and attorneys generally are surprised at the judgment. Before, an assigned mortgage was recorded the same as the original instrument, and when a money lender was approached for a loan, the absence of the assigned mortgage provided sufficient evidence to him that no assignment had taken place. Under this decision, satisfaction of mortgage may appear on file and yet the original instrument may have been assigned to another party and be equally binding. The case at issue was Henry Howard vs. V. Trowell.
“This decision will be news to the money lender, and attorneys generally are surprised at the judgment.”
This story highlights the perennial volatility of property records and lending transparency in Seattle. Much like the 'Wild West' days of early real estate filings, current housing debates often center on who truly holds the 'paper' and the power over one's home.
From readers
No comments yet. If you know something about this story — a correction, a family memory, a source — it belongs here.