Option One Mortgage Corp. v. Aurora Loan Servs., LLC
Annotate this CaseProperty Owner owned two adjacent lots, a house lot and a vacant lot. Property Owner mortgaged certain real property to Option One Mortgage Corporation. Property Owner then conveyed its house lot to an individual who, in turn, granted a mortgage to Mortgage Electronic Registration Systems (MERS). Aurora Loan Services, LLC was the servicer for MERS. Aurora later informed Option One that it intended to foreclose on the house lot. Option One filed a complaint seeking a declaration that Option One had a valid first lien encumbrance on the house lot that was superior to the Aurora mortgage. The hearing justice granted summary judgment for Option One. The Supreme Court affirmed, holding that the Option One mortgage was a valid first lien on the house lot where (1) there was no dispute the Option One mortgage was properly recorded in the town records so any subsequent purchaser or mortgagee, including Aurora, was charged with constructive notice of the Option One mortgage; and (2) a prior deed reference in the Option One mortgage description was sufficient to put a subsequent purchaser or mortgagee on notice that the Option One mortgage was intended to encumber both the house lot and the vacant lot.
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