Lend-Mor Mortgage Bankers Corp. v. Nicholas
Decision Date | 12 January 2010 |
Docket Number | 2008-09654 |
Citation | 2010 NY Slip Op 224,893 N.Y.S.2d 566,69 A.D.3d 680 |
Parties | LEND-MOR MORTGAGE BANKERS CORP., Respondent, v. EDWARD NICHOLAS et al., Defendants, and AMERIQUEST MORTGAGE COMPANY, Appellant. |
Court | New York Supreme Court — Appellate Division |
Ordered that the order is affirmed insofar as appealed from, with costs.
"Under New York's Recording Act (Real Property Law § 291), a mortgage loses its priority to a subsequent mortgage where the subsequent mortgagee is a good-faith lender for value, and records its mortgage first without actual or constructive knowledge of the prior mortgage" (Washington Mut. Bank, FA v Peak Health Club, Inc., 48 AD3d 793, 797 [2008]). Here, at the time the plaintiff, Lend-Mor Mortgage Bankers Corp. (hereinafter Lend-Mor), received a mortgage on the subject property for the sum of $244,000, a prior mortgage in favor of the defendant Ameriquest Mortgage Company (hereinafter Ameriquest) was unrecorded and did not appear in the chain of title. On its motion for summary judgment, Lend-Mor demonstrated its prima facie entitlement to judgment as a matter of law (see Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986]) by establishing that its mortgage was valid and superior in priority to Ameriquest's mortgage. Lend-Mor provided evidence establishing that it gave valuable consideration for its recorded mortgage, and that it did not have actual knowledge of Ameriquest's unrecorded mortgage or knowledge of facts that would have put it on "inquiry notice" of that mortgage (see Real Property Law § 291; Washington Mut. Bank, FA v Peak Health Club, Inc., 48 AD3d at 797). Lend-Mor obtained a title search which did not contain any indication that the subject property was encumbered by the Ameriquest mortgage. To the contrary, both the mortgage application and a credit report indicated that the Ameriquest mortgage at...
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