United States: Mortgage Acknowledgments: Tiny Deviation From Suggested Forms Can Spell Disaster

Last Updated: December 4 2013
Article by Vicki R. Harding

Weiss v. Wells Fargo Bank, N.A. (In re Kelley), 498 B.R. 392 (1st Cir. BAP 2013) –

A chapter 7 trustee sought to avoid a mortgage granted by the debtors on the basis that the acknowledgment was defective.  After the bankruptcy court granted the mortgagee's motion for summary judgment, the trustee appealed to the 1st Cir. Bankruptcy Appellate Panel.

The debtors (Shawn and Annemarie Kelley) designated a third person (Shannon Obringer) as their attorney in fact to execute documents in connection with a refinancing of their property.  On the same date that the debtors executed a limited power of attorney in Massachusetts, Obringer executed a mortgage on their behalf in Pennsylvania.

She executed the mortgages for each of the debtors "by Shannon Obringer as attorney in fact."  The acknowledgment which followed the signatures stated as follows:

COMMONWEALTH OF , Pennsylvania, Allegheny County SS:

On this 11 day of June 2007, before me, the undersigned notary public, personally appeared Shawn G. Kelley and Annemarie Kelley by Shannon Obringer as Attorney in Fact proved to me through satisfactory evidence of identification which was/were [left blank] to be the person(s) whose name(s) is/are signed on the preceding document, and acknowledged to me that he/she/they signed it voluntarily for its stated purpose.

My commission expires:  10.4.09
/s/ Magda Esposito
Notary Public

The trustee challenged the acknowledgment as defective because (1) it stated that the debtors appeared when they didn't, and (2) it did not state that the attorney in fact appeared before the notary public on behalf of the debtors to execute the mortgage as their "free act and deed."  He argued that the defects created "confusion and uncertainty" about the signatures.  The mortgagee countered that it was clear that the debtors were acting by their agent, who is the one who personally appeared.

This issue was key because the trustee's powers to assert the rights of a bona fide purchaser of real estate under Section 544 of the Bankruptcy Code to avoid a mortgage or other transfer of property are without regard to any actual knowledge of the trustee or creditors, but are subject to constructive knowledge – such as the constructive notice provided by a properly recorded document.  As reiterated by the BAP on appeal, under applicable state law if the acknowledgment was defective, the recorded mortgage would not provide constructive notice and could be avoided by a bona fide purchaser (and thus by the trustee).

The bankruptcy court sided with the mortgagee. While commenting that it would have been nice if the acknowledgment had been properly completed, the court agreed that it was clear that Obringer stood before the notary on behalf of the debtors.

On appeal, the trustee continued to assert that the acknowledgment was materially defective because (1) the debtors did not personally appear as indicated in the acknowledgment, (2) the method of verifying identification was left blank, and (3) the acknowledgment did not state that the mortgage was signed as the free act and deed of the debtors.

The BAP was not convinced by the first two points:  It was clear that appearance "by" an attorney in fact meant that Obringer appeared in a representative capacity, and the requirement to specify the evidence of identification was not based on the statute.  However, the third point turned out to be a winner for the trustee.

The court reviewed case law holding that there should be some sort of express statement that the grantors voluntarily and freely executed the instrument. It identified a statutory form (suggested but not mandatory) that addressed this requirement in the context of execution by a representive using the following language:

On this ___ day of ____ 19__, before me personally appeared A B, to me known to be the person who executed the foregoing instrument in behalf of C D, and acknowledged that he executed the same as the free act and deed of said C D.

The court noted that the governor also published a form of acknowledgment by executive order:

On this ___ day of ____ 20__, before me, the undersigned notary public, personally appeared _____ (name of document signer), provided to me through satisfactory evidence of identification, which were _____, to be the person whose name is signed on the proceeding or attached document, and acknowledged to me that (he)(she) signed it voluntarily for its stated purpose.

The acknowledgment at issue in this case tracks the form suggested in the executive order.

In finding for the trustee, the BAP concluded that an acknowledgment by an agent must clearly state that execution was the free act and deed of its principals.  Although the acknowledgment stated that it was signed "'voluntarily for its stated purpose,' we are left to speculate whether the voluntariness relates to the principals (the Debtors) or to the attorney-in-fact (Obringer)."  Thus, the acknowledgment was defective, the mortgage did not provide constructive notice to a subsequent purchaser, and the mortgage could be avoided.

In some states once a document is accepted and recorded, it can no longer be challenged based on recording defects.  Obviously that is not the case in all states, as illustrated by this decision.  Although there have been a number of bankruptcy cases where sloppy acknowledgments have resulted in mortgages being avoided, this is a particularly scary case since it turned on deficiencies in language that was part of a publicly promulgated form.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Vicki R. Harding
In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

*** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.