Full question:
A residential mortgage note was signed in November of 1998 for a primary residential loan. The terms were $131,000, 8% fixed rate with a amortization of 15 years. The note had a 'call' in 24 months with the balance due. The lien holder (individual not institutional lender) has never excised his legal right by calling the note due or charging the 18% default rate. He never sent a demand in writing or verbal. He has always accepted monthly payments and has said nothing. Now I have been approved for a loan to refinance, and he wants to charge the 18% default rate for the past seven years when I requested a payoff. Also, would 'laches' come into play in this dispute?
- Category: Debts and Credit
- Subcategory: Promissory Notes
- Date:
- State: National
Answer:
The application of laches in this situation would depend on the specific terms of the contract and the surrounding circumstances. Laches is a legal principle that can prevent a party from asserting a right if they have delayed too long, causing prejudice to the other party. Generally, the contract will dictate whether a party must provide notice before exercising their right to accelerate payments or if retroactive charges can be applied.
If the contract is unclear or ambiguous, the court will seek to determine the parties' intent based on their relationship, the nature of the contract, and the actions they took over time. This includes looking at how the parties have acted and any relevant external factors that might clarify their intentions. If there is ambiguity, it is typically interpreted against the party that drafted the unclear language.
This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.