Question

Mortgages and Security Interests: Rae"s mortgage payment check is received a day later by Big Bank. Big Bank refuses the check and accelerates the mortgage debt. Rae is unable to pay this demand and Big Bank brings action to foreclose the mortgage. Describe what defenses, if any, Rae has to the foreclosure action.

Answer 1

Solution-

The text explains that "before invoking the acceleration clause, the mortgagee must genuinely believe that the mortgagor will not be able to make good on the debt and that the mortgagee's security interest is therefore threatened". In this case, however, Rae's check did arrive though it was a day late. If the matter ends up in court, Rae can argue that Big Bank did not act in good faith because it refused to accept the payment check despite receiving it.