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Kerr v. Riley

A-2924-03T5 (N.J. Super. App. Div. 2005) (Unpublished)

MORTGAGES; ACKNOWLEDGMENTS; USURY—There is a rebuttable presumption that the notarized signature is of the person named; usury is never presumed.

Homeowners borrowed money to build a house on their own land. They granted a mortgage to cover that loan. Ten years later, they executed a new mortgage on the same land in favor of the same lender. The new mortgage was apparently executed to consolidate all of the outstanding loans between the parties, including the original mortgage loan. The consolidated mortgage was for more money and at a higher interest rate. Monthly payments shown on the mortgage were not enough to pay the interest as it came due. Eventually, when the lender sought to be repaid the balance of the mortgage loan, the borrowers asserted “that the [consolidation] mortgage was invalid because the duration of the loan was omitted from the mortgage,” an incorrect home address appeared on the mortgage documents, the monthly payment “was less than required to satisfy the interest payments, the signatures on the note were in dispute, and the notarization was in dispute.” The consolidation mortgage contained no stipulated duration, nor did the earlier mortgage. The borrower’s home address on the consolidation mortgage was wrong; it was omitted altogether from the earlier mortgage. “However, both mortgages provide[d] the identical and correct township and county in which [the borrowers] reside[d], and refer[red] to two identical tracts of land embraced by the mortgage.” The lower court “held that these anomalies and alleged irregularities did not operate to ‘cast doubt on the authenticity of the documents.’” It found that the consolidated mortgage had been properly notarized and recorded. “No handwriting expert testified. The only testimony that concerned the validity of the signatures of [the borrowers] came from [one of the borrowers], who testified that he did not remember if he signed it.” The lower court “held that such testimony could not ‘overcome the presumption that a notarized signature is that of the person named.’” Further, a comparison of various documents with the borrowers’ signatures to the consolidation mortgage caused the lower court to conclude that the signatures were authentic. The Court also found it irrelevant that some documents showed one of the borrower’s name signed as “Earle,” and others showed it signed as “Earl.”

The borrowers also argued that the consolidation mortgage was unconscionable. “In support of this argument, they assert[ed] that the interest rate of 16% [on the consolidation mortgage] was usurious in light of the fact that the mortgages and loans consolidated into [the consolidation mortgage] had considerably lower interest rates and that [they, the borrowers] were unsophisticated parties, as indicated by the fact that [the husband] could not read or write and had not graduated high school as [his wife], could read and write, but had not graduated high school.” The lower court found that the interest rate was “in line with the national average at the time. Usury is never presumed and the burden is upon the one who alleges it.” Further, the usury statutes pointed to by the borrowers were adopted after the mortgage had been executed. Upon appeal, the Appellate Division upheld the lower court’s ruling.

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