Mitchell v. Church
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Author:  admin [ Sat Sep 23, 2006 7:09 am ]
Post subject:  Mitchell v. Church

Mitchell v. Church
Not Reported in A.2d, 2006 WL 2194738
July 31, 2006

Upon Cross Motions for Summary Judgment
*1 Dear Counsel:
This is a mortgage foreclosure. Defendant signed a contract for home repairs. He financed the work through a conditional sale contract, allegedly secured by a mortgage on the house. Based on the nature of the contract and the federal truth-in-lending law, which applies here, the contract boldly warned that assignees were subject to the debtor's contract defenses. The warning was meant to prevent anyone who bought the commercial paper from claiming holder-in-due-course status, which is precisely what is happening here.
According to Defendant, the contractor was a scam artist, probably in cahoots with the lender. While Defendant admits he signed the contract, he denies receiving the loan's proceeds or the remodeling. And, he also denies signing the mortgage. Defendant has some circumstantial evidence backing his defenses.
In any event, the original lender sold the loan and the mortgage now belongs to Plaintiff, who is attempting to foreclose. Defendant seeks to raise all his defenses concerning the renovation's failure and fraud, including the allegedly forged mortgage. Plaintiff is emphatic that he is not enforcing the contract. He is relying on the mortgage and, as suggested above, he asserts holder-in-due-course status.
Although it is a New Jersey case and it addresses damages in another context, the fundamental reasoning of Associates Home Equity Services, Inc. v. Troup, FN1 is helpful here. Associates explains the history and operation of the FTC's “Holder Rule.â€

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