An Erroneous legal description in a Credit Union mortgage was fatal to enforcement of mortgage. Here, Electric Boat Community Federal Credit Union (EBC), granted a loan to Louis Salerno (Salerno) that was supposed to be secured by a mortgage on the debtor’s real estate.

In the mortgage document, however, the credit union inadvertently identified the real estate to be mortgaged as “Unit number 5B” instead of the correct description of “Units 3B and 3C.”

The credit union did properly record its mortgage with the Land Records Office, although the mistaken legal description did not place others on notice of the intended lien on units 3B and 3C.

Thereafter, Connecticut National Bank (CNA), a judgment creditor of Salerno, placed a judgment lien on Unit 3B. CNA had no actual or constructive notice of the credit union’s intended mortgage.

The credit union brought an action in court to foreclose on the mortgage and correct its legal description. CNA, however, contended that its judgment lien was superior to the credit union mortgage since the mortgage legal description was erroneous and the credit union did not correct the legal description before CNA filed its judgment lien on Unit 3B.

The court held that CNA’s lien would be superior to the credit union’s mortgage since CNA had no prior information as to the intended credit union mortgage.

The court noted that most other States might allow the credit union to correct the mortgage legal description and render the CNA lien inferior to the credit union’s interest, however, in Connecticut the first party to record its lien is superior to subsequent filings.

Contrarily, if CNA had received any prior notice of EBC’s intended lien, the court may have ruled differently. Electric Boat Community Federal Credit Union vs. Louis Salerno, et al. (Connecticut Superior Court, Case No. 517968).

Author: Charles R. Harroun, Attorney at Law