DO YOU DARE ISSUE A WARRANTY DEED OR ANY DEED WITHOUT LIABILITY?

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The inescapable conclusion at this point, is that title on more than 100 million real estate transactions is at the very least in doubt and quite probably corrupted. In legalese that would be expressed as clouded, unmarketable (i.e., you can’t sell it or finance it, because nobody will take it), defective or fatally defective. The only exceptions I can think of are those deals where raw land has been purchased from a long-standing owner with no debt attached to the land or where a home is purchased or refinanced where the last transaction is twenty years ago. Most people are unaware that they are sitting on shifting sands instead of a solid foundation — where title is properly recorded in the recording office of the county in which the property is located.

Yet people and institutions are issuing instruments fraught with liability and the high probability that the transaction — and the representations contained in the instrument they signed —- will be the subject of litigation later when someone tries to clear title or collect damages. Here are some examples:

  1. A Warranty Deed, required in most transactions, requires the person signing to (a) attest and prove they are who they say they are (b) that they or the party whom they represent has title (usually fee simple absolute) and (c) that if they are signing as an agent, they have provided proof (usually recorded with the deed in properly recordable form) of their authority. The signor is promising, in exchange for the consideration paid, that if this Warranty Deed turns out to be challenged by anyone, they will defend the challenge and pay damages if they lose. Reliance on the title company, mortgage banker, mortgage lender or anyone else is not a defense although the signor could cross claim against those people and bring them into the lawsuit. The point is that the cost of litigating these cases could rise into tens of thousands of dollars. The cost of losing could rise into hundreds of thousands of dollars, or even millions of dollars. 
  2. A “Special Warranty Deed” might have some language of limitations that SHOULD put the buyer on notice but most people rely upon the title or closing agent, or their lawyer (if they have one) to make sure that the deed gives them the title they thought they were getting. This too could give rise to litigation because of representations at closing, representations in the title commitment or policy etc.
  3. A Satisfaction of Mortgage requires the person signing to (a) attest and prove they are who they say they are (b) that they or the party whom they represent is the creditor and is the owner of the rights under the mortgage or deed of trust and (c) that if they are signing as an agent, they have provided proof (usually recorded with the Satisfaction in properly recordable form) of their authority. The signor is promising (unless someone played withe the wording), in exchange for the consideration paid, that if this Satisfaction turns out to be challenged by anyone, they will defend the challenge and pay damages if they lose. Reliance on the title company, mortgage banker, mortgage lender or anyone else is not a defense although the signor could cross claim against those people and bring them into the lawsuit. The point is that the cost of litigating these cases could rise into tens of thousands of dollars. The cost of losing could rise into hundreds of thousands of dollars, or even millions of dollars. 
  4. A Release and Reconveyance is the same as a Satisfaction of Mortgage. So whether you received a satisfaction of mortgage or a release and reconveyance, your assumption that the prior lien was paid off and is now officially satisfied and removed from the records as encumbrance on the land may be, and I think, probably is wrong. We have seen several cases here at livinglies where the wrong party (Ocwen in one case) took the oney issued the Satisfaction and then refused to either give back the money or provide any additional information even though it is now apparent that they were not the creditor, not he owner of the mortgage and had no authority to issue the satisfaction. 
  5. A Trustees Deed on Foreclosure is much the same as a Warranty Deed. Potential Trustee liability here is huge. It requires the person signing to (a) attest and prove they are who they say they are (b) that they or the party whom they represent is the Trustee or “substitute Trustee” (see below) and is the owner of the rights under the mortgage or deed of trust, (c) that if they are signing as an agent, they have provided proof (usually recorded with the Satisfaction in properly recordable form) of their authority and (d) that they are in fact the Trustee and that they have performed the statutory duties of due diligence that is required of a Trustee under a Deed of Trust. The signor is promising (unless someone played withe the wording), in exchange for the consideration paid, that if this Deed turns out to be challenged by anyone, they will defend the challenge and pay damages if they lose. Reliance on the “beneficiary” who usually comes out of nowhere, “lender” who also usually comes out of nowhere, title company, mortgage banker, mortgage lender or anyone else is not a defense although the signor could cross claim against those people and bring them into the lawsuit. The point is that the cost of litigating these cases could rise into tens of thousands of dollars. The cost of losing could rise into hundreds of thousands of dollars, or even millions of dollars. The banks don’t actually worry about this because most “Trustees” are “substitute Trustees” in which a substitution was filed given apparent authority to a new “Trustee” who is not an independent title agent or some similar entity but rather an agent that is in the foreclosure business with the bank that has inserted itself into the transaction as a “pretender lender.” Due diligence by the Trustee would have revealed most robosigning and other fraudulent practices, but due diligence, contrary to the requirements of statute, was never performed because they were no longer taking the orders from the legislature. They were skipping over their statutory duties and taking orders from a party who is merely alleged to be the lender even though it is not the same party as stated on the original note and mortgage ( deed of trust).
  6. Substitution of Trustee: Until securitization came into play it was a rare occurrence that the trustee would be substituted. The Trustee on teh Deed of Trfust would simply be given instructions by the payee on the note and the named secured party in the mortgage) deed of trust) to commence default and dforeclosure proceedigns. But now in virtually every foreclosure there is first a “substitution of trustee’probably because the original trustee would perform the due diligence required under statute and revealed potential problems which would have held up or cancelled the foreclosure. requires the person signing to (a) attest and prove they are who they say they are (b) that they or the party whom they represent is the creditor and is the owner of the rights under the mortgage or deed of trust and (c) that if they are signing as an agent, they have provided proof (usually recorded with the Satisfaction in properly recordable form) of their authority. The signor is promising (unless someone played withe the wording) that if this Substitution of Trustee turns out to be challenged by anyone, they will defend the challenge and pay damages if they lose. Reliance on the “beneficiary” who usually comes out of nowhere, “lender” who also usually comes out of nowhere, title company, mortgage banker, mortgage lender or anyone else is not a defense although the signor could cross claim against those people and bring them into the lawsuit. In many cases the substance of the substitution is that the “new” beneficiary is in effect appointing itself or its agents who promise to do their bidding instead of using the original Trustee or someone else who take their duties seriously. The point is that the cost of litigating these cases could rise into tens of thousands of dollars. The cost of losing could rise into hundreds of thousands of dollars, or even millions of dollars. The banks don’t actually worry about this because most “Trustees” are “substitute Trustees” in which a substitution was filed given apparent authority to a new “Trustee” who is not an independent title agent or some similar entity but rather an agent that is in the foreclosure business with the bank that has inserted itself into the transaction as a “pretender lender.” Due diligence by the Trustee would have revealed most robosigning and other fraudulent practices, but due diligence, contrary to the requirements of statute, was never performed because they were no longer taking the orders from the legislature. They were skipping over their statutory duties and taking orders from a party who is merely alleged to be the lender even though it is not the same party as stated on the original note and mortgage ( deed of trust).

There are many other documents that fall within the same level of analysis like the Notice of Default (which comes from the alleged authority of the  Substitute Trustee, based upon information from what is probably an undisclosed source, the Notice of Sale (which appears right on its face, but is subject to the same analysis as to the signor, and other documents.

The Bottom Line is that homeowners and institutions alike are facing potential litigation and liability as the years roll on, with few if any witnesses to back them up and in the case of homeowners precious little in the way of resources to fight off the litigation.

Check with a real property and litigation attorney before you take any action based upon what you see here. They should be licensed in the county in which the property is located.

13 Responses

  1. Ray Shelton May 19, 2014 at 7:49 pm
    If you are being foreclosed on By US Bank and or SN Servicing ( Please No Other banks or services please) Please check the signatures on your deed in your county clerks office, if you are sure that forgery or falsification of your documents has taken place then call me ASAP we are going after anyone who has wrong us by forgery and or uttering forgery under the RICO ACT. This is happening now 2014 Please join us. call 352 274 8467 Ray Shelton
    #1. Did A Serious Crime of forgery and Uttering forgery take place by US Bank and their attorneys against you ?
    #2. The OCCs Cease and desist order signed by US Bank and its Board of directors specifically says that US Bank and its third parties ( Servicer’s and attorneys) will stop this kind of criminal activity immediately and make restitution, but they have only escalated their activities of illegally taking homes in Florida via Forgery and falsifying documents etc.:

    MEDIA STORY LINE. A Well known highly respected Florida Notary and his wife who witness the signing of a deed and mortgage have come forward and signed a statement sworn under oath that the signatures on a deed and mortgage were originally signed in Royal Blue. They even went to the Marion County Clerk of the Court and had another notary witness the fact that they viewed the recorded deed and mortgage that was submitted by US Bank and then witnessed that the documents were not sign in Royal Blue. But in fact were signed in Black. It is clear by any reasonable person or most important by Law Enforcement and our Judges, that after US Bank claimed a lost note status for a couple of years, they had no choice but to forge the deed and note in order to have standing in court.
    The Shelton family is being illegally foreclosed on by US Bank who has already paid out multi million dollar fines, but no one has gone to jail. Who is actually committing these crimes? Was it DocX or LPS or is it their attorneys? This needs to be discovered and prosecuted by the Feds because it is a very serious issue that is costing the American public billions of dollars in loses. It apparently doesn’t matter to US bank that the homeowner is right or wrong because no normal family can stand up to the money that is used to win by attrition against a homeowner. Who will protect the public and stop the destruction of hundred of thousands of families lives all across this nation?
    This is also very wrong because Us Bank and their attorneys may be undermining the integrity of our entire Justice system and the American way of life as it is known today. Will it end up that it is ok to forge our most treasured document without any prosecution by our government? This is becoming a crime wave that is unparalleled in history and America must stop it. Have Multiple interstate crimes been committed multiple times By US Bank and their attorneys ? Should these issues be considered within the Rico Crimes Laws. US Bank has not stopped their behavior, are the fines way to low and they just don’t care because the numbers prove that they can still make huge profits by continuing on the same path? Where is Law Enforcement? Where is Eric Holder? Where is OBAMA???
    The Shelton Family didn’t discover the facts about the forgeries until they had already lost in every court even the appeals court. Now that they found out and have proof of forgery shouldn’t all the other ruling be null and void? The Shelton’s are filing a Civil Criminal Lawsuit against the attorneys Andrew Braaksma and Paul McKenna and another Civil Rico law suite against US Bank and SN servicing.
    The Shelton’s have filed a bar complaint with the Florida bar against Andrew Braaksma out of Miami and his partner Paul Mckenna for Uttering Forgery and other reasons to be announced. They have also filed a complaint with the FBI and with the Florida Attorney General. They will soon ask the Office of State wide prosecution to take the case. There will also be some press conferences set up to expose the Miami Attorneys and US Bank. Shouldn’t this case be moved up to the Federal courts and demand relief and for the prosecution of the Miami Attorneys and US Bank? To join us please call 352 274 8467 Ray Shelton

  2. […] on September 20, 2011 at 4:03 am said: Hi Anonymous, Been wondering that for a long time. Eversince I realized that my previous […]

  3. but this is exactly what title insurance is for. i’m not seeing the huge liability that that article suggests

  4. Thanks for covering this topic that I always wonder about. BTW, Dallas DA filed a lawsuit on Tuesday. This will be an interesting development against MERS, aka lender, and title company…. This has been what I have been waiting for to see whether majority of filing at local county clerk’s offices are fraud and flawed.

  5. (Disclaimer: I am not an attorney—and this is not legal advice.)

    But…what would happen if we all just started treating them (the servicers who are debt collectors and are treating us like total crap), like the unsecured debt collectors that they really are???

    What would you say to a credit card debt collector if you either were going to file for bankruptcy, or because you were out of a job and couldn’t get one—or even if you suspected that the alleged debt was mired in “fraud”…and therefore were unable or unwilling to pay???

    You would send them a cease and desist letter—dispute the debt and say:

    “Greetings!

    You are hereby notified under provisions of FDCPA–Fair Debt Collections Practices Act—that your services are no longer desired.

    1) You and your organization must CEASE AND DESIST all attempts to collect the above ALLEGED debt. Failure to comply with this law will result in my immediately filing a complaint with the federal trade Commission and this State’s Attorney General’s office. I will pursue all criminal and civil claims against you and your company.

    2)I am disputing the validity of this debt under the terms of the FDCPA, section 809, a-c.

    3) I am also quite concerned regarding the “threat” of “foreclosure” that you have been sending in writing to me—which is in direct violation of FDCPA, section 807.

    4) Furthermore, if any negative information is placed on my credit reports by your agency after receipt of this notice, this will cause me to file suit against you and your organization, both personally and corporately, to seek any and all legal remedies available to me by law.

    In conclusion, since it is my policy to neither recognize nor deal with collection agencies, I intend to settle this account with the ORIGINAL CREDITOR…as is my legal right.

    Have a nice day.

    Sincerely,
    _____________
    _______________

    (Disclaimer: I am not an attorney—and this is not legal advice.)

  6. …because it’s all unsecured false default debt being manipulated by debt collectors masquerading as true creditors…fraud begets fraud.

    oh, what a tangled web we weave, etc…

  7. THANK YOU NEIL FOR THIS POST

    I have a lone that the servicer has represented in writing 8 times, yes 8 times, 8 different entities each time that are represented as the creditor/investor/holder/owner of our loan…and they finally stated the loans trust name of XYZ- 2005-ABC to us after years of asking, BUT when they sent the SHORT SALE agreement documents and Deeds, they are using another trust name, not even the one that was provided in the 8 Reponses before. THESE Servicers keep the borrowers in a cloud of fog

    HOW IN THE WORLD DO WE KNOW WHO WE ARE DEALING WITH AND WHO CAN REALLY SIGN A SATISACTION OF MORTGAGE and Close this chapter…From reading all the horror stories of people completing Short sales and Deed in lieu of foreclosure and being sued later, when the borrower thought they had completed a true transaction to settle the matter…to only be sued later.

    If the servicer and trustee attorneys will not Indemnify the borrowers I guess, sadly, the borrowers can not settle and move on with there lives and have to sue for quiet title.

    I DO NOT WANT A FREE HOUSE…I want to rebuild my life…but the Servicers and Trustee’s and pretenders attorneys have kept this veil of confusion up and sent us all down empty rabbit holes for years.

    WHEN YOU ENTER A CONTRACT YOU EXPECT TO THE OTHER SIDE TO DEAL FARILY AND IN GOOD FAITH….that is/was out the window with this mortgage mes..

  8. MBS—mortgage-backed securities—were never “mortgage” backed.

  9. Hi Anonymous,

    Been wondering that for a long time.

    Eversince I realized that my previous owner had refi’ed a couple of times and his file didn’t contain any satisfaction of mortgage for both times. The MERS file showed both loans still active. I refi’ed twice and neither times, the satisfaction of mortgage was filed with the county and they still look active on MERS.

    Don’t get it. The more I dig, the less I get it.

  10. And, who covered-up GSE (false) default “transfers” from GSE to bank/debt buyer/investor/creditor — yes — MERS.

  11. Number 3 — next big shoe to drop. Does anyone really think that their current refinance paid off the prior loan/refinance??

    First question asked myself when all of this surfaced — and have been involved for many years — was — “why would a bank let a “profitable loan” go through their fingertips into another bank — by a refinance?” Have been involved in business/finance/securities — academically and professionally my entire adult life — this did not make sense to me.

    Answer — they would not. As long as “loan” (not really a loan) — was out of GSE control — the “bank”/debt buyer/investor/creditor that purchased collection rights would NEVER let that loan (collection rights) go anywhere else. Thus, subprime refinances never left control of the purchasing entity that purchased collection rights directly from the GSE. And, GSEs could just not sell a “loan” — that would be securities fraud — GSE could only sell collection rights to (false) default loans.

    And, you thought you got a mortgage refinance??

    Why would GSEs do this?? Because they then turned around and purchased the “MBS” to the collection rights from the banks — produced a higher return. Securities fraud on MBS — which is why security investors are winning. And, fraud to homeowners — but, we are still waiting.

    Nothing prior satisfied — did not need to be. You do not need to “satisfy” collection rights mods. Discharges/Satisfaction of Mortgages filed by refinance — take another look. Robo–signing before Robo-signing was in vogue.

  12. Amen.

  13. That’s why whatever we discover and whatever docs we currently have should be burnt on several copies of CDs and stashed away in different secured places. I have one in my car, one in my office, one at home and a few friends have one. The only place i didn’t put one in is a bank vault… No way I’m going to incur expenses payable to a bank! I expect skeletons to keep coming out of the closets for years to come and so should we all.

    We’re in for a really, really, really long haul!

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