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Court Voids U.S. Bank Loan

Iowa appeals court overturns decision of lower court

Dec. 22, 2009

By MortgageDaily.com staff


A state appeals court has voided a loan made by U.S. Bank, N.A. The case involves a deceased borrower, a bungled loan application and a widow who never signed the loan.

U.S. Bank, N.A., originally made the $89,759 loan to George Battle Jr. in July 2003, according to a copy of the Dec. 17 opinion from the Iowa Court of Appeals. The loan application included many blank fields and data that conflicted other information available to the bank.

Later that year, Battle married Sherry Battle, who moved in and occupied the property as her homestead.

George Battle subsequently refinanced the loan with U.S. Bank on Sept. 13, 2004, for $104,700. While the institution has no copy of his application from that transaction, it did have a copy of the 2003 tax returns listing Sherry Battle as spouse.

But she was not listed on the loan.

After George Battle died in January 2006 without a will, the estate unsuccessfully sought to have the note voided because the wife did not sign the note.

Instead, the lower court allowed the 2003 note to be reinstated on the basis of "equitable principles," enabling U.S. Bank to enforce the $89,759 note.

The appeals court, noting that U.S. Bank had already filed a satisfaction of lien on the earlier loan, reversed the lower court's ruling and voided the note.

"As a business engaged in the process of making loans secured by residential mortgages, U.S. Bank has total and complete control over the entire loan process," the opinion stated. "We conclude U.S. Bank negligently conducted the 2004 loan process."

The court cited the poorly completed loan application received on the earlier loan, incompetent branch personnel and the tax returns which indicated the borrower was married.


IN THE MATTER OF THE ESTATE OF GEORGE BATTLE JR., Deceased. BRUCE P. BICKEL, Administrator of the Estate of George Battle Jr., EMMETT A. BATTLE, and SHERRY A. BATTLE, Petitioners-Appellants, vs. U.S. BANK, NATIONAL ASSOCIATION, N.D., and its Unknown Assignees, Trustees and Successors in interest, Respondent-Appellee.
Case No. 9-607 / 09-0170, Dec. 17, 2009 (In the Court of Appeals of Iowa)


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