Pro Se Homeowner "Loses The Farm" In Attempt To Void Sale Leaseback-Type Foreclosure Rescue Deal

A recent ruling by the Idaho Supreme Court dealt defeat to a pro se homeowner-couple facing foreclosure of their farm in their attempt to unwind a foreclosure rescue, sale leaseback-type arrangement. According to the facts in the case, when entering into the arrangement with the operator:

• "they signed the warranty deed and contract for reconveyance under duress caused by those documents being presented to them about ten minutes before the real property would have been sold at a foreclosure sale."

The case provides an example of what not to do when trying to unwind these type of deals. Regrettably for the homeowners, they failed to raise, among other claims, the equitable mortgage doctrine which, if successful, would have resulted in recharacterizing the deal as a secured loan.(1)

For the ruling, see Bagley v. Thompson, Docket No. 36041-2009, 2010 Opinion No. 107, (Supreme Court of Idaho, Idaho Falls, October 6, 2010).

(1) See Dickens v. Heston, 53 Idaho 91; 21 P.2d 905 (Id. 1933); See also Equitable Mortgage Doctrine In Idaho.