Gordon M. Orloff Quoted in Massachusetts Lawyers Weekly
Rackemann attorney Gordon M. Orloff was quoted in the Massachusetts Lawyers Weekly article, “Bank not entitled to equitable lien on home equity line of credit,” which addressed the 1st U.S. Circuit Court of Appeals’ recent ruling in a case concerning a lender’s entitlement to an equitable lien on property securing a home equity line of credit that its predecessor issued to the father of the current owner.
In the article, Orloff noted the court’s acknowledgment that an equitable lien to prevent unjust enrichment can indeed arise when funds advanced by a lender and purportedly secured by a defective mortgage are used to enhance the value of the parcel or to benefit its owner.
Orloff said, “In other words, the new mortgagee steps into the shoes of the original senior mortgagee to the extent the funds were used to extinguish that senior mortgage, leaving the junior lienholder’s position unchanged. Both of these equitable principles permit a lender to overcome its legal error, but only to the extent the holder of an interest in the property is not harmed.”