Basile v. Erhal Holding Corporation
Appellate Division of the Supreme Court of New York
538 N.Y.S.2d 831 (1989)
Basile (plaintiff) mortgaged her property to Erhal Holding Corporation (defendant) as security for a loan, then sued to void the mortgage as usurious. Before trial, the parties settled, with Basile agreeing to a mortgage plus a deed in lieu of foreclosure that Erhal could record if she defaulted. Basile later defaulted, and Erhal recorded the deed and asked the trial court to declare that Basile had waived her right to redeem the property. Basile instead asked the court to order Erhal to accept full payment of the mortgage and return the deed. The trial court sided with Erhal, finding Basile had waived redemption, and Basile appealed.
Whether, under mortgage law, a deed given as security for a loan will be treated as a mortgage regardless of any attempt to label the transaction as a sale or other transfer.