Ameriquest- it's like jogging in deep snow.

The Maryland Court of Appeals decided this "bad affidavit" case on August 31, 2010. It has now been left to the bankruptcy court to deal with over 100 pending cases where Trustees are suing to invalidate, or "strip", liens. This office, alone, has over 20 cases, valued at close to $6 million. Each is a potential total loss under a title policy, as each lender may potentially be stripped of its lien and relegated to "general unsecured" status.

I have heard that Judge Kier, Chief Judge of the bankruptcy court, has assigned one law clerk to research the issue for all the judges. I think he wants to avoid potentially conflicting results from the four judges handling the cases.

It has become rather comical, though, to see both Trustees and counsel for the lienholders declare victory when the Ameriquest decision really does little more than amplify exisiting law.

But enough, for now. I have 20+ briefs to write!

Is that Deed of Trust fully and properly executed?

Do you have a claim or case involving a deed of trust with missing or mistakenly executed affidavits of consideration and disbursement? This is all the rage among several bankruptcy trustees, who have been filing adversary cases seeking to invalidate recorded liens. The black letter law says that this type of defect is "self-cured" if a party to the instrument fails to make a formal challenge to the documenet within six months.

We have at least six of these cases in the office. All parties in these cases are anxiously awaiting the Maryland Court of Appeals decision in Ameriquest Mortgage v. Paramount, #52, argued on January 7, 2010. It will decide whether a lienholder may challenge an earlier recorded deed of trust on the basis of an allegedly defective affidavit of consideration and disbursement where that challange was made a full eighteen (18) months after the instrument was recorded.

We have stayed some of the cases, by agreement of the parties, as we await this important court decision.