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Thursday, December 15, 2005

Recent Pennsylvania Tenancy By The Entirety Case

The Pennsylvania Supreme Court recently issued an opinion in Regions Mortgage Inc. v. Muthler, an interesting tenancy by the entirety case.  Susan and Joseph Muthler bought a home in 1999 in both of their names.  Their mortgage company unilaterally dropped Susan's name from the mortgage.  Joseph died shortly thereafter.  Susan called the mortgage company to try to get the mortgage changed to her name.  The mortgage company (big mistake) refused.  Susan spoke with an attorney, who informed her (correctly) that the home passed to Susan unencumbered on her husband's death and that she had no obligation to pay the mortgage.  The Pennsylvania Supreme Court held that the mortgage company's unilateral mistake in leaving Susan off the mortgage was not grounds for reformation, and Susan in fact now owns the property free and clear of the mortgage.  The case is a good illustration of why it is a supremely bad idea to issue a mortgage to only one joint tenant or tenant by the entirety.

Thanks to Jody for the pointer.

Ben Barros

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