Mitchell v. Yacko
161 A.3d 14
| Md. Ct. Spec. App. | 2017Background
- In June–July 2005 Mitchell sought a fixed‑rate mortgage from Fremont and executed a sales contract specifying a fixed 30‑year loan. At the July 11, 2005 closing she discovered the loan documents were for an adjustable‑rate loan, stopped the closing, and had the signed documents stamped "VOID."
- Mitchell demanded cancellation; Fremont sent letters acknowledging cancellation of the adjustable‑rate transaction and stating a new fixed‑rate loan at 6.2% would apply. No new note or deed of trust was executed, and Mitchell kept the loan proceeds and made payments for about eight years.
- On July 14, 2005 a deed of trust was recorded in the Prince George’s County land records. The copy later filed in the 2015 order to docket foreclosure lacked the "VOID" and cancellation markings and bore "REDACTED" stamps; an adjustable‑rate note also appeared without Mitchell’s handwritten voiding or the lender’s cancellation stamp.
- Substitute trustees (for U.S. Bank) filed an order to docket foreclosure in August 2015 attaching the note and deed and affidavits certifying they were "true and accurate copies." Mitchell filed a pro se Rule 14‑211 motion to stay sale and dismiss, alleging the note and deed were voided/forged and that proper ownership/endorsement and service were lacking.
- The circuit court denied Mitchell’s Rule 14‑211 motion without a hearing. The Court of Special Appeals vacated that denial and remanded for a hearing, ruling that materially altered/forged documents cannot support a foreclosure and that Mitchell’s motion facially pleaded forgery.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Validity of note/deed (forgery/alteration) | Mitchell: the note and deed were voided at closing ("VOID" stamped) and the copies filed are materially altered/forged. | Trustees: loan was modified to fixed rate; Mitchell kept proceeds and paid for years so documents were valid. | Court: foreclosure may not be based on forged/materially altered documents; Mitchell pleaded a facially valid forgery defense; remand for hearing. |
| Certification that the note is a "true and accurate copy" | Mitchell: the order to docket did not contain true copies because original showed VOID/cancellation. | Trustees: affidavits certify the exhibits as true and accurate copies. | Court: disputed authenticity raises a triable issue; affidavits do not foreclose hearing. |
| Endorsement/negotiability of the note | Mitchell: endorsement in blank and negotiability are invalid. | Trustees: note is negotiable and endorsements proper; they have right to foreclose. | Court: disposition of endorsement/ownership is unresolved; hearing required. |
| Service of order to docket | Mitchell: service was improper. | Trustees: service was proper. | Court: procedural/service disputes were raised but the forgery issue was dispositive; hearing required to resolve all defenses. |
Key Cases Cited
- Wells Fargo Home Mortgage, Inc. v. Neal, 398 Md. 705 (2007) (foreclosure is an equitable, summary in rem proceeding; equitable defenses including clean‑hands doctrine and pre‑sale injunctions recognized)
- Buckingham v. Fisher, 223 Md. App. 82 (2015) (Rule 14‑211 requires particularized factual/legal basis for defenses; forgery is a viable Rule 14‑211 defense and compels a hearing if facially valid)
- Hlista v. Altevogt, 239 Md. 43 (1965) (articulates the clean‑hands equity doctrine applicable where litigant seeks equitable relief)