Non-Securitization Effect on Title

I just finished a seminar given by NBI which was basically in lay terms “How to Repair the Chain of Title.” We covered everything about assignments, breaks in the chain etc. The opportunity arose for questions. I was the first to ask a question, in which I posed a hypothetical that is an accurate reflection of the manner in which foreclosures are being completed and deeds are issued upon the close of bidding at the auction, which it turns out was a question that was on the mind of some other listeners. The answer was that the foreclosure sale is invalid, the deed is in essence a Wild Deed, which under most state statutes is simply void, and does not require any action by the court or anyone else to invalidate it. In other words, in the typical Wild Deed situation, it is simply ignored.

A Wild Deed in simplistic terms is a Deed from someone who is not already in the title chain. The mere filing of self-serving documents as the pretender lenders have done, is a nullity. Any act proceeding from a nullity is also a nullity including the foreclosure and the deed that was issued is a nullity. This is because of the alleged auction sale in which the alleged creditor made a credit bid, was outside of the chain of title. What chain of title? Of course the one in the public records of the county in which the property is located. Add to that the fact that the party who made the credit bid was not a creditor and you can see how messy this venture is getting. The illusion of finality of foreclosure is creating a very expensive nightmare.

I’ll write more about this later. But it certainly corroborates the statement I made starting three years ago — that even if the “foreclosure sale” has already occurred, legal title to the house is still in the name of the homeowner and the deed issued from the foreclosure sale is void. It also means that legal title to the security instrument (deed of trust or mortgage) remains in the name of the loan originator.

If the loan originator is still alive and well, it is possible to re-create the assignment that was intended, but it isn’t easy as you must recite in each affidavit and post hac assignment the actual facts and circumstances surrounding the transfers, why they were not done before etc. This is basic property law.

If the loan originator is dead, it might not be possible to correct the title deficiency as to the loan, without a court order. This also corroborates my prior statements that non-judicial sale is not available in claimed securitized mortgages, because the chain of title does not exist. The only available remedy is judicial foreclosure — if they can make the required allegations in good faith and then prove those allegations to be true, with the burden squarely on the party seeking foreclosure.

One would think that in a State like Arizona they would want to file judicial foreclosures, because they can probably make a case for a deficiency as well. But the pretender lenders are fighting any notion that judicial foreclosure is required or even appropriate. Why? Because they cannot in good faith make the necessary allegations in a lawsuit that would support the relief they seek, and they certainly cannot prove those allegations. The facts are in nearly all cases, that there was no assignment, indorsement or delivery before the notice of default and no self-serving document can change that simple fact. The record is clear and MERS is not “PUBLIC RECORDS” (just ask them).

Bottom line: They want ONLY non-judicial sales because they could not even file a foreclosure lawsuit without suffering defeat, fines and penalties for filing frivolous pleadings. Put another way, they want non-judicial sale because they know they would lose in a judicial proceeding. And the Courts that allow this are contributing to a growing mountain of title problems that are starting emerge now as literally not subject to correction. The outcome? Well, if the courts keep ruling for the pretender lenders, the homeowners — even the ones foreclosed long ago — are still the legal owners of the property and the pretender lenders are going to get more objections from the attorneys for buyers saying that Seller cannot provide clear title. Those buyers without an attorney or whose attorney miss this central, simple record title issue, will have the problem passed on to them. This type of situation has occurred before. It always ends the same way — with the Courts and legislature back-tracking and arbitrarily creating a fix to the dismay and loss, usually of the banks and those who relied upon them.

14 Responses

  1. Per the PSA of these trusts, they lay out who the note should be transfered to for the benefit of the certificate holders. You then see a completely different story when it’s foreclosure time.

    A complete break in the chain of title.

    If you look in your deed of trust, around page 10 or so under:

    20. Sale of Note; Change of Loan Servicer; Notice of Grievance. “The Note or a partial interest in the Note (together with this Security Instrument) can be sold one or more times without prior notice to Borrower.

    So what about when the note was bifurcated from the security instrument? Isn’t that a breach of contract under item number 20?

    Did you agree to sign a loan and a promissory note. Answer: I did agree to sign what was purported to be a loan as defined in the traditional definition of a loan, where one party suffers a financial loss and credits the other party. This was not what actually happened at the signing table.

  2. In California they call them Ficticious Deeds

  3. BANK OF AMERICA POSSIBLY GOING DOWN !!! Insolvency issues. They may be liquidating. They are selling their servicing and trustee rights.

    http://www.shamethebanks.org/mortgages-in-the-news/is-bank-of-america-hiding-an-insolvency-problem-from-the-public

    No wonder their collection calls suddenly stopped. My phone has been quiet lately. I thought they stopped calling me because they were getting ready to start foreclosure proceedings against me. I was already in my karate stance too. LOL

  4. No wonder BofA has stopped calling me! Read this article. They are selling their servicing rights and trustee rights:

    http://www.shamethebanks.org/mortgages-in-the-news/is-bank-of-america-hiding-an-insolvency-problem-from-the-public

  5. Neil,

    Thanks for this stellar posting! How clear this makes things for everyone!

    Now the question comes…..should a homeowner not in default seek a Quiet Title Acttion if the originating broker is gone and the Deed of Trust has not been assigned to anyone beyond them, and when MERS is named?

    If anyone else has had good luck with a QTA, I would love to hear about it too!

    Thanks for the most awesome resource of Loan Fraud Truth available on the planet, Neil!!

    -Seeking

  6. Here is the puzzling life of my commercial mortgage loan, can anyone throw in their 2 cents worth?
    xxx (“lender”) issuer/sponsor, Prudential Securities Secured Financing Corp.,depsitor, xxx(lender) servicer,
    Wilshire Credit Corp., back up servicer, JPMorganChase Bank,collateral agent, f/k/a Chase Bank of Texas, N.A., JPMorganChaseBank,indenture trustee,f/k/a The Chase Manhattan Bank. Radian Asset Assurance Inc. insurer. This was the info on the original offering, xxxMortgage Loan Trust 1999-2, of which Prudential was the underwriter, and Wachovia the Trustee. Now, when I google the above-named Mortgage Loan Trust, I get Credit Suisse Seasoned Loan Trust 2006-1, where I find that 75% of the loans in the CS Trust are from xxx1999-2, and further more, “these mortgages were sold to Ocwen Mortgage Asset Trust 1 by trustees or indenture trustees. (there is only a 1 in the title, no year) .Fitch Ratings rated this on Dec.11,2006. Looking further, I find the following- xxxMortgage Loan Trust 1999-2, Placement type: Public / Summary data: paid off/ Last Update: 4/15/2009/ Closing date: 6/29/1999/ Amount:millions 218.90/ Tranche A-1 Currency code: USD/ $192,010.000 Tranche A-2 21,890,000. Collateral type: HOME EQUITY LOAN! this was a straight up commercial mortgage on a commercial property! What is this about? And to top it all off, I am answering to Wells Fraudgo, XXXX2005-2, with a Lender-to-MERS, MERS-to-Wells Fraudgo assignment dated in 2005, executed in fall of 2009, no record in the courthouse. Call me confused, any input would be appreciated. Thanks.

  7. Another question –

    If a Wild Deed is found, would trigger the Title Insurance policy and possibly payoff the loan?

  8. So, the question I have then –

    Will the COMBINATION COMPREHENSIVE TITLE AND SECURITIZATION SEARCH, REPORT AND ANALYSIS – offered EXPOSE a possible “Wild Deed”?

    Also – can they show if the loan was possibly double-funded or exactly how-much the pretender-lender used from the warehouse funders to fund our loan…?

    Would a “Wild Deed” be justification for a borrower to file a Quiet Title or some other type action that might simply deny the foreclosure mill the ability to file their assignment prior to foreclosure..?

    Article – Real Property Section 10-702 Annotated Code of Maryland – Section 3-406 (a) is based on former Section 3-406. With respect to alteration, Section 3-406 adopts the doctrine of Young v. Grote, 4 Bing. 253 (1827), which held that a drawer who so negligently draws an instrument as to facilitate its material alteration is liable to a drawee who pays the altered instrument in good faith. Under Section 3-406 the doctrine is expanded to apply not only to drafts but to all instruments. It includes in the protected class any “person who, in good faith, pays the instrument or takes it for value or for collection.” Section 3-406 rejects decisions holding that the maker of a note owes no duty of care to the holder because at the time the instrument is issued there is no contract between them. By issuing the instrument and “setting it afloat upon a sea of strangers” the maker or drawer voluntarily enters into a relation with later holders which justifies imposition of a duty of care. In this respect an instrument so negligently drawn as to facilitate alteration does not differ in principle from an instrument containing blanks which may be filled. Under Section 3-407 a person paying an altered instrument or taking it for value, in good faith and without notice of the alteration may enforce rights with respect to the instrument according to its original terms. If negligence of the obligor substantially contributes to an alteration, this section gives the holder or the payor the alternative right to treat the altered instrument as though it had been issued in the altered form.

    The foreclosure mill used forged signatures & notary – plus the loan has “never” met the requirements set forth within the PSA. Lack of Inspections – zoning violations – lender used fraudulent U&O to close the loan.

    Just some thoughts…

    I want to purchase the COMBO Title Search and get all the facts about our loan and hopefully may even send the boneheads to JAIL for their deliberate FRAUDS… I sent an email about the COMBO Title search could someone respond so I can get it ordered…

    Thanks

  9. I kept waiting for this article. I knew from knowing something about real estate that if the assignment wasn’t in the county records, that a huge title mess would ensue. The banking cartel has wanted to swindle and twist hundred years of real estate law….??

  10. Neil ..and thank him our mentor
    was this the seminar –
    Property Issues Encountered After Foreclosure (#53514ER)?
    National Business Institute (NBI) provides continuing legal education (CLE) training seminars, teleconferences, webcasts, self-study materials, and online
    was there any material worthy of memorandum or opinion to used in a complaint???
    thank you!

  11. Yes Brian, you may say “Fighter!”

  12. Lenders typically have an opportunity to do mischief as follows: obtain judicial foreclosure under claim of an assignment of mortgage, and a deficiency by default on an undefended tenuous claim under that assignment. They turn over the previously unobtainable note seeking the whole amount, or less greedy, just sell the deficiency judgment to some collection agency that pursues the unknowing innocent former homeowner for $$$–to squeez something out of them.

    But doesn’t this allow the tables to be turned? The unfortunate ex-homeowner in no-judicial foreclosure still retains a type of executory interest in the realty. He conveys that interest to a lawfim that then sues the current occupant to set aside the title [quiet title?], the current occupant brings in the title insurer, which pays the lawfirm to settle the case?

    Would this not cause the title insurer to then pursue the foreclosing entity for misrepresentation or breach of warranty? Wouldn’t this be an effective way to force the claimants to perfect their claims properly—and slow the seizure of homes. So go buy Quit Claims from the disposessed —maybe to be fair —-set up an agreement whereby the ex-homeowner receives a piece of the settlement in exchange for the quit claim to reduce the upfront cash paid by the quit claim claimant–to allow them to foot the cost of the court action?
    This is a tough row to hoe for litigants because everybody will fight–but just one good case could cause a lot of introspection. Who would buy a home foreclosed in this manner? More importantly: who would issue title insurance? How could deals close?

    Only works in non-judicial foreclosure states——suggests dont give DILs.

  13. Interesting!
    My original loan was with a mortgage company. BAC is now my servicer and of course, there is the dummied up assignment from the now defunct mortgage company to BAC which was done by a foreclosure mill and signed by one of their attorneys.

    Of course, the issue now is, after the foreclosure case is over, how do you rebuild the title, regardless of the outcome?

    Anyone who tells you that the real estate market is recovering, is pulling your leg!

  14. http://www.scribd.com/doc/34653189/PLAINTIFF-S-DEMURRER-OPPOSITION-ONEWEST-BANK-OPPOSITION-TO-MOTION-TO-STRIKE-INDYMAC-MORTGAGE-SERVICES-A-DIVISION-OF-ONEWEST-BANK-FSB-Opp

    Niel check out the entanglement set forth in these pleadings to roll “Indymac” into the master servicer, sponsor, buyer and seller and subservient of Deutsche Bank. This is an opposition to an “indymac” demurrer in California. They are trying to use Onewest now, I wont let that happen and my Indymac disappear.

    Best and thanks for all the teachings.
    brian davies–Californian
    and may I say fighter lol.

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