Court: Wife whose husband forged documents can keep her home

The Minnesota Court of Appeals today awarded a victory to a Bloomington woman, whose home was foreclosed on by CitiMortgage after her now ex-husband took out a mortgage without her knowledge.

The court ruled that the mortgage William Akers took on a Bloomington home is nullified because he forged his wife’s name on a power of attorney. In 2008, Akers borrowed nearly $233,000 to pay off a $133,000 loan his wife, Sandra, didn’t know about, and $75,000 in credit card debt.

In their divorce decree — when she was awarded the property — a judge said her ex-husband had sole responsibility for the mortgage.

But CitiMortgage foreclosed on her home, saying the mortgage was the responsibility of both even though Mr. Akers forged his wife’s name. It said both people benefitted from the loan.

Today, the Court of Appeals sided with Mrs. Akers’ contention that the mortgage is invalid because she didn’t sign it.

Under state law, a mortgage isn’t valid unless both spouses sign it, the court said.

The evidence in the record indicates that William told Sandra in 2004 that he paid off the 1997 home-improvement loan with the proceeds of a commission check. The evidence also indicates that Sandra did not learn of the 2004 loan until 2008 because William directed all correspondence and statements to his business address or a private post-office box. CitiMortgage suggests that Sandra should have known about the mortgage and would have known about it with more diligence. But CitiMortgage cites no caselaw for the proposition that a non-signing spouse may be equitably estopped from denying the validity of a mortgage based on what a non-signing spouse could have or should have known.

Second, CitiMortgage has no evidence that Sandra voluntarily accepted and retained the proceeds of the conveyance. CitiMortgage relies on evidence that William used some of the proceeds of the 2004 loan to pay off the 1997 home-improvement loan, which reduced both William’s and Sandra’s indebtedness, and that William used some of the proceeds of the 2004 loan “to do things with” Sandra. But the evidence also shows that Sandra did not learn of the 2004 loan until 2008, through her own investigation.