Owning a home jointly does not always mean both owners sign the same loan documents. But when a lender moves to foreclose on a property, the distinction can become crucial, particularly when one co-owner is not given an opportunity to prevent the foreclosure. In Iowa, a woman who jointly owned and lived in a house but had never signed its promissory note challenged a foreclosure after the lender failed to send her a notice giving her an opportunity to catch up on missed payments.The Iowa Supreme Court ruled in her favour on November 6, 2026, in Newrez LLC, d/b/a Shellpoint Mortgage Servicing v. Lynae D McMillen Dickey Tesdall. The decision, available on Justia, reversed the district court's foreclosure judgment and vacated an earlier appeals court decision. The justices held that the woman qualified as a borrower under the mortgage and was therefore entitled to a separate notice of her right to cure the default before foreclosure proceedings could move forward.Woman co-owned the house but did not sign the loan noteThe dispute began in 2019, when Lynae D McMillen Dickey Tesdall and Donald S Aegerter purchased a house in Mason City, Iowa, as joint tenants with rights of survivorship. Wells Fargo Bank provided $260,775 in secured financing for the purchase.
Iowa Supreme Court overturns foreclosure after lender failed to notify a co-owner of the default
In a landmark decision, the Iowa Supreme Court determined that Lynae D McMillen Dickey Tesdall, a co-owner of a property, must receive notice before any foreclosure actions can proceed. Despite not signing the promissory note, she was listed as a borrower in the mortgage. While absent, missed payments accumulated, and Wells Fargo neglected to inform her of the ongoing overdue amount.
In brief
Owning a home jointly does not always mean both owners sign the same loan documents. But when a lender moves to foreclose on a property, the distinction can become crucial, particularly when one co-owner is not given an opportunity to prevent the foreclosure. The decision, available on Justia, reversed the district court's foreclosure judgment and vacated an earlier appeals court decision.
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