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‘Signature’ defense won’t stop foreclosure

Law of the Land

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In the case Karnitz v. Wells Fargo Bank, N.A., homeowners Joel and Tanya Karnitz built a home with a construction bridge loan in the names of both husband and wife, then refinanced into a permanent home loan with lender Wells Fargo. At close of the refinance mortgage transaction, the lender's documents requested only that Joel Karnitz sign to obtain the loan and mortgage, despite the fact that both Joel and Tanya were on the title and the construction bridge loan for the home. As a result, Tanya never signed -- and was never asked by Wells Fargo to sign -- the loan or mortgage documents. After a few years, the Karnitzes filed for bankruptcy and eventually defaulted on their mortgage with Wells Fargo, which instituted foreclosure proceedings on their home. The Karnitzes sued, claiming that Wells Fargo's mortgage was invalid under Section 507.02 of the Minnesota Statutes, which requires both spouses to sign a "conveyance" of a married couple's homestead, including ...