Home > Uncategorized > Forged Mortgage Documents: Hard to Prove?

Forged Mortgage Documents: Hard to Prove?

A reality of the real estate crisis that hit in 2008 –  we discovered (and are still discoverying) that there were those individuals and companies who benefitted greatly from falsifying loan documents. Case in point, the owner of Prime Title Insurance Company in Grand Rapids, MI was just sentenced to prison for his role in a mortgage loan fraud scheme. See the article at: http://www.mlive.com/news/grand-rapids/index.ssf/2013/05/owner_of_grand_rapids_title_ag_1.html

 

In the context of a civil lawsuit, proving that a loan document has been forged can be a challenge.  This is true for several reasons:

1. The initial burden rests on the party claiming the document has been forged.

So long as a real estate documents has been executed with the proper formalities, it is presumed valid.

 

2. The value of evidence, including credibility of witnesses, is decided by a Judge (or Jury). 

Whether a document is the product of fraud or forgery,  is a factual determination, and the evidence is to be weighed by the trier of fact – (a Judge or a Jury).

 
 
The Recent Case of Berry v. Myslinski:
 
A December 2012 Michigan Court of Appeals decision illustrates this: Berry v. Myslinski, 305564, 2012 WL 6178157 (Mich. Ct. App. Dec. 11, 2012).
 
At issue in Berry was whether the signatures on certain real estate loan documents were that of Nassab Berry or whether they were forgeries.
 
 
The relevant facts are as follows:
 
Nassab Berry “Mother” had five children: Robert Berry, the oldest, Fred Berry, Lawrence Berry, Don Berry, and Mona Amen (the “Kids”). The oldest son, Robert, and Mother were frequent business partners.
 
Mother purchased commercial property in Dearborn Heights, Michigan, which oldest son, Robert managed.
 
In 1997, Robert had a heart attack. After the heart attack, from all accounts, he was depressed. He began to drink and gamble more. According to his brother Fred, starting in 2003, Robert became secretive about his business interactions with Mother.
 
Around this time, the family discovered that Robert had convinced Mother to sign for and purchase property in Taylor, Michigan. Robert then took  out a slew of other mortgage loans, two of them with the Defendant, Myslinksi, a private investor.
 
Eventually the Kids decided to give brother, Lawrence, power of attorney over Mother’s financial affairs due to Robert’s apparent instability, and Mother”s problems with the early stages of dementia.
 
 
Robert died. The Kids thereafter stopped making payments on the mortgage, owned by private investor, Defendant.  So Defendant foreclosed by advertisement, and the Kids sued, on behalf of Mother – claiming that the mortgage loans had been forged, and Defendant had perpetrated a fraud against Mother. Therefore the mortgages were void – ab initio (a fancy legal term meaning – “from the beginning”)
 
At trial, the Court considered the evidence, which included:
 
1. a forensic document analysis expert, who stated his expert opinion that the signatures were forged;
 
2. Mother, who testified she never authorized the loans or mortgages;
 
3. Sons Lawrence and Fred who both testified that the mortgages were not Mother’s.
 
The Court found this convincing and held documents to be forged, right?
 
Wrong.
 
The Trial Court did not find the expert’s testimony “reliable”. Further, the Court did not find the mother’s testimony reliable, since it had been admitted that she suffered from memory loss and dementia. Further,  the Court did not find the sons’ testimonies reliable, since there was no evidence they ever attended the signings.  In contrast, the Court found the Defendant’s testimony, and that of the notary present at the signing, to be credible. The mortgages were therefore deemed valid.
 
The Court of Appeals affirmed, holding that the “trial court did not clearly err in its findings of fact.”
 
Application:
 
In the context of a lawsuit, nothing can be taken for granted, even if it seems like a sure fire win. I can picture the Berry Kids in this case, once they enlisted an expert who said he would testify the documents were forged, probably thought the case was a “slam dunk” victory. Clearly, it wasn’t. Fraud and forgery is a high burden to prove, which rests on the party trying to prove it. The more evidence to support your burden the better off you are.  Regardless, at the end of the day, the credibility of your witnesses and the value of your evidence will be left in the hands of a judge or jury.
 
 
Feel free to contact me with questions or comments at: Jeshua@dwlawpc.com. or call me at (616) 454-3883.
 
 
 
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Categories: Uncategorized
  1. May 15, 2013 at 4:34 pm

    I look forward to reading more of your blog. I have another story about a forged mortgage that you might find interesting…my headline is Homeowners Signatures forged by the bank; subjected to years of litigation for reporting crime at http://mortgageforgery.wordpress.com/2013/04/24/an-apology-to-our-neighbors-our-neighborhood-and-our-city/

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