Mortgages • Deed in Lieu of Foreclosure

Robinson v. LLEM Corp., PICS Case No. 14-0276 (C.P. Philadelphia Jan. 28, 2014) Bernstein, J. (3 pages).

Where a deed in lieu of foreclosure is executed with a mortgage, a defendant mortgagee is entitled to judgment as a matter of law in a quiet title action instituted by plaintiff mortgagor. Affirmed.

Plaintiff Kevin Robinson brought a quiet title action for properties on which he borrowed money from defendant LLEM Corp. As part of the mortgage, plaintiff signed deeds in lieu of foreclosure and agreed that they would be filed in the case of default. Plaintiff failed to pay as required, and defendant’s intermediary filed the deeds, transferring ownership from plaintiff to defendant.

The court noted that a mortgagee may foreclose on the subject property upon default, and that a deed in lieu of foreclosure negates the need for a foreclosure sale as it transfers the subject property to the mortgagee in satisfaction of the debt. The court found that the subject property in the instant was properly taken as payment for the mortgage when the deed in lieu of foreclosure was filed.

The court rejected the argument advanced by plaintiff in his post-trial motions regarding the behavior of defendant’s intermediary. The court ruled that whether the intermediary had authority to file the deed in lieu of foreclosure was legally irrelevant to the controlling issue in the instant action — whether plaintiff owned the subject property, which the court found he did not.