B-148968, JUN 20, 1962

B-148968: Jun 20, 1962

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

ESQUIRE: WE HAVE YOUR LETTER OF MAY 16. YOU STATE THAT HELEN AND CHARLES NAGY WERE DIVORCED IN THE EARLY 1940'S AND THAT IN THE PROPERTY SETTLEMENT CHARLES NAGY OBTAINED THE REAL ESTATE INVOLVED IN THE MORTGAGE. NAGY IS DECEASED AND NONE OF HIS RECORDS HAVE BEEN FOUND. YOU STATE THAT FURTHER REAL ESTATE TRANSACTIONS ON THIS LAND CANNOT BE ACCOMPLISHED UNTIL THE MORTGAGE REFERRED TO IS DISCHARGED. ADVISED THAT THERE WAS NO RECORD OF A RECONSTRUCTION FINANCE CORPORATION LOAN TO CHARLES AND HELEN NAGY AND THAT A DISCHARGE OF THE MORTGAGE OR A DISCLAIMER OF INTEREST COULD NOT BE EXECUTED IN THE ABSENCE OF SUCH RECORD. YOU WERE REFERRED TO THE PROVISIONS OF SECTION 2410 OF TITLE 28. WAS REVISED.

B-148968, JUN 20, 1962

TO LEONARD J. PETERSON, ESQUIRE:

WE HAVE YOUR LETTER OF MAY 16, 1962, REQUESTING CERTAIN ACTION BY THIS OFFICE CONCERNING A MORTGAGE TAKEN BY THE RECONSTRUCTION FINANCE CORPORATION FROM CHARLES AND HELEN NAGY IN 1940.

YOU STATE THAT HELEN AND CHARLES NAGY WERE DIVORCED IN THE EARLY 1940'S AND THAT IN THE PROPERTY SETTLEMENT CHARLES NAGY OBTAINED THE REAL ESTATE INVOLVED IN THE MORTGAGE. SUBSEQUENTLY THE SANILAC COUNTY BANK TOOK SEVERAL MORTGAGES ON THE PROPERTY, EVEN THOUGH THE MORTGAGE IN QUESTION HAS NEVER BEEN DISCHARGED. MR. NAGY IS DECEASED AND NONE OF HIS RECORDS HAVE BEEN FOUND. YOU STATE THAT FURTHER REAL ESTATE TRANSACTIONS ON THIS LAND CANNOT BE ACCOMPLISHED UNTIL THE MORTGAGE REFERRED TO IS DISCHARGED.

IN REPLY TO YOUR INQUIRY, THE OFFICE OF DEFENSE LENDING, TREASURY DEPARTMENT, LIQUIDATION AGENT FOR THE FORMER RECONSTRUCTION FINANCE CORPORATION, ADVISED THAT THERE WAS NO RECORD OF A RECONSTRUCTION FINANCE CORPORATION LOAN TO CHARLES AND HELEN NAGY AND THAT A DISCHARGE OF THE MORTGAGE OR A DISCLAIMER OF INTEREST COULD NOT BE EXECUTED IN THE ABSENCE OF SUCH RECORD. YOU WERE REFERRED TO THE PROVISIONS OF SECTION 2410 OF TITLE 28, U.S.C. CONCERNING MEASURES PROVIDING FOR QUIET TITLE.

YOUR LETTER OF MAY 16, 1962, STATES THAT YOU COULD NOT FIND THIS SECTION BUT YOU FOUND UNDER SECTION 905, TITLE 28 OF THE CODE A PROVISION AUTHORIZING THE COMPTROLLER GENERAL TO ISSUE A CERTIFICATE OF RELEASE WHICH SHALL OPERATE TO RELEASE THE PROPERTY FROM A LIEN. YOU REQUEST THAT THIS OFFICE TAKE THE NECESSARY ACTION IN THIS REGARD.

TITLE 28, U.S.C. WAS REVISED, CODIFIED AND ENACTED INTO LAW ON JUNE 25, 1948, BY PUBLIC LAW 773, 80TH CONGRESS, 62 STAT. 869. SECTION 2410 OF TITLE 28, U.S.C. AS NOW CONSTITUTED EMBRACES SECTIONS 901 THROUGH 905 OF THE FORMER TITLE 28 OF THE CODE. THE SECTION, WHICH IS DIVIDED INTO FOUR SUBSECTIONS, PROVIDES GENERALLY FOR THE INCLUSION OF THE UNITED STATES AS A PARTY IN ANY CIVIL ACTION IN FEDERAL OR STATE COURTS TO QUIET TITLE TO OR FOR FORECLOSURE OF A MORTGAGE OR OTHER LIEN ON REAL OR PERSONAL PROPERTY ON WHICH THE UNITED STATES HAS NOR CLAIMS A MORTGAGE OR OTHER LIEN. SUBSECTIONS (B) AND (C) SET FORTH THE PROCEDURES TO BE FOLLOWED WITH RESPECT TO SUCH SUITS. SUBSECTION (D) WHICH IS SUBSTANTIALLY SIMILAR TO THE FORMER SECTION 905 OF THIS TITLE, SEEKS TO ASSIST A HOLDER OF A DULY RECORDED LIEN SENIOR TO A LIEN OF THE UNITED STATES, OTHER THAN A TAX LIEN, WHERE THE PROCEEDS FROM THE SALE OF THE PROPERTY COULD NOT SATISFY MORE THAN THE LIEN OF THE SENIOR LIEN HOLDER. THIS SUBSECTION PERMITS THE SENIOR LIEN HOLDER ONLY TO REQUEST THE OFFICER CHARGED WITH THE ADMINISTRATION OF THE LAWS IN RESPECT TO WHICH THE LIEN ARISES TO HAVE THE LIEN EXTINGUISHED. IF THAT OFFICER FINDS THAT THE SALES PROCEEDS OF THE PROPERTY WILL NOT SATISFY WHOLLY, OR IN PART, THE LIEN OF THE UNITED STATES A REPORT THEREOF WILL BE MADE TO THE COMPTROLLER GENERAL WHO WILL ISSUE A CERTIFICATE RELEASING THE PROPERTY FROM THE LIEN.

IT DOES NOT APPEAR FROM THE FACTS AS REPORTED THAT A JUNIOR LIEN IS HERE INVOLVED SINCE THE MORTGAGE IN QUESTION PREDATES ANY EXISTING LIENS. ACCORDINGLY, THE PROVISIONS OF SUBSECTION (D) REFERRED TO ABOVE DO NOT APPEAR TO BE APPLICABLE TO YOUR CASE.

YOUR REMEDY APPEARS TO BE ONE OF SUIT PROVIDED UNDER SUBSECTION (A) OF SECTION 2410, TITLE 28, U.S.C. IF JUDICIAL EXTINGUISHMENT OF THE MORTGAGE LIEN IS NECESSARY.