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IN THE COURT OF APPEALS OF IOWA No. 0-959 / 10-1015 Filed February 23, 2011 JP MORGAN CHASE BANK NATIONAL ASSOCIATION, Successor in Interest to WASHINGTON MUTUAL BANK f/k/a WASHINGTON MUTUAL BANK, FA, Plaintiff-Appellee, vs. DENNIS M. HAWKINS, et al., Defendants-Appellants. ________________________________________________________________ Appeal from the Iowa District Court for Polk County, Artis Reis, Judge.

Dennis and Jan Hawkins appeal the district court`s grant of summary judgment to JP Morgan Chase Bank on its foreclosure petition. AFFIRMED.

Kevin Cunningham of Howe, Cunningham, Lowe & Kelso, P.L.C., Urbandale, for appellants. Benjamin W. Hopkins of Petosa, Petosa & Boecker, L.L.P, Clive, for appellee.

Considered by Mansfield, P.J., and Danilson and Tabor, JJ.

2 TABOR, J. This appeal involves a mortgage foreclosure action. Dennis and Jan

Hawkins challenge the district court`s grant of summary judgment to JP Morgan Chase Bank on its foreclosure petition. They allege the mortgage was invalid under Iowa Code section 561.13 (2009) because only one spouse signed it. Because the homestead exemption statute does not apply to the purchase money mortgage executed in this case, we affirm the district court`s grant of summary judgment. I. Background Facts and Proceedings On April 25, 2007, Dennis Hawkins executed a promissory note to JP Morgan Chase Bank (the bank) in a principal amount of $100,000 for residential property in Des Moines, payable in installments with a yearly interest rate of 7.75%. On the same day, he executed a purchase money mortgage to the bank. Paragraph twenty-five of the mortgage appeared in all capital letters and professed that by signing this mortgage the borrower was voluntarily giving up his homestead exemption rights with respect to claims based on this mortgage. The mortgage listed Dennis as a married man. His wife, Jan, did not sign the mortgage. The mortgage was filed in the Polk County recorder`s office on May 7, 2007. On October 13, 2009, the bank filed a foreclosure petition against Dennis and his spouse, if any. The petition indicated the bank elected foreclosure without redemption, meaning the mortgaged property would be sold at auction after entry of judgment unless the defendants demanded to delay the sale. The

3 petition alleged that on September 1, 2008, the mortgagors executed a modification agreement setting a yearly interest rate of 5.75% on the unpaid principal balance of $110,051.93. The petition also alleged that the note was in default and Dennis owed the bank $109,873.72 plus interest, fees, and costs. Dennis filed a pro se answer1 on November 9, 2009, demanding a delay of the sale. The bank sent a notice, dated November 17, 2009, expressing its intent to file a written application for default against Dennis`s spouse. On November 20, 2009, Dennis filed a motion to dismiss, contending the bank did not have a valid mortgage because the property was their homestead and his wife did not sign the mortgage. On January 4, 2010, the bank moved for summary judgment on its foreclosure petition against the Hawkins. The bank also filed a request for a default judgment entry under Iowa Rules of Civil Procedure 1.971 and 1.972. The district court issued its decree on January 27, 2010, concluding Dennis`s spouse, Jan, was in default for failing to file pleadings in response to the bank`s petition. The decree also reached the merits of the petition, concluding the Hawkins were in default on the mortgage and the bank was entitled to judgment against them. The court foreclosed the mortgage as the first lien

against the residential property and delayed the sale for six months based on the request of the mortgagors. On February 5, 2010, Dennis and Jan filed a motion to amend or enlarge the district court`s findings of fact and conclusions of law under Iowa Rule of Civil Procedure 1.904. The Hawkins also sought to renew their motion to dismiss the
1

The answer was filed on a form developed by Iowa Legal Aid.

4 foreclosure, alleging the mortgage was invalid because it was not signed by Jan. On that same day, Jan filed a motion to set aside the default judgment under Iowa Rule of Civil Procedure 1.977. The motion alleged Jan believed she was represented by Iowa Legal Aid along with her husband and that the pleadings had been filed on her behalf, as well as her husband`s behalf. On February 12, 2010, the bank resisted the Hawkins` motion to enlarge or amend and the motion to dismiss. The resistance asserted that the

mortgaged property was not a homestead entitled to protection under Iowa Code section 561.13 because the foreclosed mortgage was a purchase money mortgage that did not provide the Hawkins a homestead interest in the real estate. On May 20, 2010, the district court denied the Hawkins` motions. The court reasoned that the homestead exemption in section 561.13 did not apply to the purchase money mortgage. Dennis and Jan Hawkins appeal from this ruling. II. Standard of Review The Hawkins advance two issues on appeal: (1) the district court erred in refusing to set aside the default judgment against Jan and (2) the court erred in denying the Hawkins` motion to dismiss the forfeiture action based on the invalidity of the mortgage. A proceeding to set aside a default judgment under rule 1.977 is at law. Cent. Nat'l Ins. Co. of Omaha v. Ins. Co. of N. Am., 513 N.W.2d 750, 753 (Iowa 1994). District courts are vested with broad discretion in ruling on a motion to set aside a default judgment. Id. We will view the evidence in the light most

5 favorable to upholding the ruling and will find an abuse of that discretion only if the court`s findings of fact are not supported by substantial evidence. Id. Generally, we review an equitable claim to foreclose a mortgage de novo. Iowa State Bank & Trust Co. v. Michel, 683 N.W.2d 95, 98 (Iowa 2004). But in this case, review is for correction of legal error, because the appeal challenges the grant of summary judgment. See Moser v. Thorp Sales Corp., 312 N.W.2d 881, 886 (Iowa 1981). III. Mootness JP Morgan Chase alleges in its appellee`s brief that the Hawkins` challenge to the foreclosure action is now moot because the Hawkins did not take action to stay execution of the foreclosure decree and a sheriff sale already occurred.2 A sheriff`s deed was issued to Federal Home Loan Mortgage

Company and recorded in the Polk County recorder`s office on August 3, 2010 . The Hawkins did not file a reply brief to counter the bank`s claim of mootness. A case is moot when the issues involved have become academic or nonexistent, or when judgment, if rendered, will have no effect on the controversy. First Nat'l Bank v. Heimke, 407 N.W.2d 344, 345

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