In Ocwen Loan Services v. Quinn, a decision rendered in October of 2016, but recently approved for publication at 2016 N.J. Super. LEXIS 167 (App. Div. 2016), the New Jersey Appellate Division affirmed the ruling of the Superior Court, Passaic County, granting summary judgment in favor of a plaintiff-mortgagee and against defendants who both held a life estate in the subject property. (The New Jersey Supreme Court denied certiorari on Feb. 7, 2017.)

In so doing, the court found that, although the defendants did not sign the plaintiff's mortgage, their life estates were subordinated based on the principles of replacement and modification, as well as the equitable principles recognized by the court in Sovereign Bank v. Gillis, 432 N.J. Super. 36 (App. Div. 2013).

The facts regarding the underlying foreclosure action were undisputed. The plaintiff sought to foreclose on a Sept. 21, 2007, refinance loan in the amount of $380,000 executed by defendant Marla Wuebbens Quinn in favor of IndyMac Bank, F.S.B. Previously, on Nov. 12, 2004, Quinn's parents, defendants Louisa Wuebbens and David Wuebbens, deeded the subject property to Quinn and retained life estates for themselves. In the deed reserving the life estates, the Wuebbens agreed to remain responsible for maintenance and upkeep of the property, including the payment of taxes and insurance. The 2007 mortgage paid off a prior 2005 mortgage loan in the amount of $260,000, also in favor of IndyMac, which was executed by Quinn, her husband Thomas Francis Quinn, and the Wuebbens. The title commitment IndyMac obtained for the 2007 mortgage did not disclose the existence of the Wuebbens' life estates, and they were therefore not asked to, and did not, execute the 2007 mortgage.