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Bar News - May 4, 2007

Morning Mail: Premier Capital Decision Blurs Meaning of Foreclosure


Every now and then our court issues a whopper of a decision. On March 30, 2007, in Premier Capital v. Skaltsis, the [NH Supreme Court] ruled that a promissory note secured initially by a mortgage lives for 20 years after default even when the mortgage deed given as security has been foreclosed and no action can be brought upon the mortgage itself.


The bottom feeders of the world who feed off of uncollectible notes must be in heaven.


The court reasoned, “Although the mortgagee no longer has recourse to the property once it has been sold free and clear at foreclosure sale, he may still assert, in an action against the debtor (the mortgagor), that where the covenants of the mortgage given to secure the note remain undischarged, the debtor waived the right to plead the statute of limitations for 20 years.”

Get your arms around that.


The court didn’t say what covenants they have in mind. Foreclosure, in my mind, pretty well ends any action that can be brought to recover the land because foreclosure is recovery. Now, anyone who has a foreclosure in their 20-year past may have a new credit rating in their future.


Paul McEachern


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