Mortgage Signature Fraud in NJ - What Happens When The borrower Claims "That's Not My Signature"?

--> In this post I discuss the issue of mortgage fraud as it relates to a borrower's claim that the signature appearing on the mortgage is a forgery.   On September 19, 2012 I am scheduled to try a case involving this very issue on behalf of a private mortgage lender seeking to enforce a mortgage pledged as collateral in connection with a business loan transaction.   Mock v. Bae, et al., Superior Court of New Jersey, Chancery Division, Bergen County, Docket No.: F-58854-10.   Click here to download a copy of my trial brief filed with the Court.

Succinctly summarizing from the trial brief, in New Jersey duly executed, notarized and recorded mortgage instruments  are presumptively valid and enforceable, and are presumed to have been made for good and valuable consideration.. In re Shaw, 51 F.Supp. 566, 568 (D.N.J. 1943), and N.J.S.A. 12A:3-308.  Under New Jersey law, a mortgage instrument must be duly acknowledged, proved and certified at the time the loan transaction is consummated.   N.1.S.A. 46:14-2.1 provides that in order for a deed or other instrument to be acknowledged, the maker of the instrument shall appear before an officer authorized to take acknowledgments or proofs and acknowledge that it was executed as the maker's own act. "If a deed or other instrument cannot be acknowledged or proved for any reason, the instrument may be proved in Superior Court by proof of handwriting or otherwise to the satisfaction of the court."  N.J.S.A. 46:14-4.1. 

Under N.J.S.A. 46:14-4.2, " ... a signature includes any mark made on a document by a person who thereby intends to give legal effect to the document. A signature also includes any mark made on a document on behalf of a person, with that person's authority and to effectuate that person's intent." Id.  N.J.S.A. 46: 14-6.1 enumerates a list of "officers" in New Jersey who are authorized to acknowledge signatures on documents, and includes a notary public.  N.J.S.A. 146:14-6.1(2).  A defendant's notarized signature is prima facie evidence that he/she signed the document without the need for the notary's testimony.  N.J. Evid. R. 902(h); N.J.S.A. 2A:82-17.  Moschillo v. Jovanov, 2010 N.J. Super. Unpub. LEXIS 3130 (App. Div. 2010).

A certificate of acknowledgement as to the execution of a mortgage is open to attack only in the case of fraud, and that in the absence of fraud the execution is conclusive even as to bona fide purchasers. See Mitschele-Baer, Inc. v. Livingston Sand & Gravel Sales Co., 108 N.J. Eq. 286 (N.J. Ch. 1931). "It should be the aim of the courts, when the mortgage is bona fide, to preserve and not to destroy." McDonald vs. H.B. McDonald Const. Co., 117 N.J. Eq. 181 (1934), citing Howell v. Stone & Downey, 75 N.J. Eq. 289 (E. & A. 1909). O ur courts have long recognized that when the bona fides surrounding the giving of a mortgage are not questioned, "[T]he statute should not be used as an instrument of inequity any more than of fraud."  McDonald, 117 N.J. Eq. at 183, citing Patrisco v. Nolan's Point Amusement Co., 10 N.J. Misc.
397 (Ch. 1932).

A party challenging his/her signature on a mortgage bears the burden of proof by clear and convincing evidence.  See Fazzio v. Equity One, Inc., 2006 N.J. Super. Unpub. LEXIS 2249 (App. Div. 2006(Appeals court refused to disturb trial judge's conclusion that the forgery of the borrower's signature on a mortgage subordination agreement had been proven by clear and convincing evidence).  Clear and convincing evidence "should produce in the mind of the trier of fact a firm belief or conviction as to the truth of the allegations sought to be established."  In re Purrazzella, 134 N.J. 228, 240 (1993) (quoting Aiello v. Knoll Golf Club, 64 N.J. Super. 156, 162 (App. Div. 1960)).   It must be "so clear, direct, and weighty and convincing as to enable [either a judge or jury] to come to a clear conviction, without hesitancy, of the truth of the precise facts in issue."   In re Seaman, 133 N.J. 67, 74 (1993).

Typically, a handwriting expert should be retained to support a forged signature claim.