Bank President Laments: "Never Do Business With Family!" As Improper Notarization Allows Brother-In-Law/Borrower To Successfully Void Lender Mortgage
- Businessman borrows approximately $8,000,000 from Bank.
- Businessman signs all loan documents.
- Bank President, who just so happens to be Businessman's brother-in-law, notarizes all loan documents signed by Businessman.
- Businessman defaults on loan shortly thereafter.
- Bank starts foreclosure action.
- Businessman files Chapter 11 bankruptcy.
- In the bankruptcy proceeding, Businessman attempts to void Bank's mortgage on the grounds of improper notarization by Bank President, his (probably now-estranged) brother-in-law.
According to the court (my emphasis added, not in the original text):
- In this case, the issue is the validity of the notarization of the signatures on the deed of trust. Nebraska law plainly provides that "[a] notary public is disqualified from performing a notarial act as authorized by Chapter 64, articles 1 and 2, if the notary is a spouse, ancestor, descendant, or sibling of the principal, including in-law, step, or half relatives." Neb. Rev. Stat. § 64-105.01.
***
- As Mr. Baer's brother-in-law, Mr. Maher [ie. Bank President] was disqualified from notarizing his signature. The exception at section 64-214 permitting bank officers or employees who are notaries public to acknowledge any written instrument given to the bank does not salvage this transaction because section 64-105.01 disqualifies a relative from performing the notarial acts authorized in article 2, which includes the exception for banks.
***
- The bank's deeds of trust and modifications thereto were improperly acknowledged, were not lawfully recorded, and are therefore void. Separate judgment will be entered for the plaintiff [ie. Buisnessman].
For the ruling, see In re BowlNebraska, L.L.C. (USBC, D. Neb. March 15, 2010).
<< Home