When is the assignment of mortgage effective against the homeowner?

In order for an assignment of mortgage to be effective, the property owner must be given notice by the existing owner of the mortgage lien acknowledging that there had been a transfer of ownership of the mortgage lien to a new, identified owner of the mortgage lien.  In order to enforce the mortgage lien, the mortgage instrument must be recorded and it must be facially valid (that is, apparently valid because of compliance with existing statute). There is no time limit on recording the mortgage instrument after it has been executed by an authorized officer of the previous owner of the mortgage lien.

 This gets tricky. The fact that a written instrument exists does not mean that it is facially valid. It also does not mean that the content of the instrument is authentic and valid. An assignment of mortgage without a conveyance of the underlying obligation is a legal nullity. Many courts presume that the underlying obligation has been transferred simply because the note has been endorsed. But in many cases, the homeowner has prevailed because that presumption was tested, and the claimant was unable to provide corroboration of the purchase and sale of the underlying obligation for value as required by 9 – 203 of the UCC, which has been adopted verbatim in all U.S. jurisdictions.
And always remember that Article 9 governs foreclosure of security instruments — not Article 3, as is frequently argued. Yes, it IS possible to be able to get a judgment on a note without owning the underlying obligation. No, it is not possible for a claimant to enforce the mortgage without owning the underlying obligation.
But failure to raise the issue is waiving the issue. The court will presume the transfer of the obligation merely from the endorsement of the note. The burden is on you to rebut that presumption or, more likely, to show that the attorneys who say they represent the claimant have failed or refused to produce what they were legally obligated to produce in response to a QWR, DVL, or discovery demands. Having failed to provide corroboration for the presumptions that have been raised with their documents, they may no longer avail themselves of the benefits of those presumptions. Translation: case over — they have no claim.
 Also, you should be very careful not to accept the argument that the signatory on the assignment of mortgage was authorized to execute the instrument. In most cases this is not true. In most cases the business entity on whose behalf the assignment was executed is not the owner of the mortgage lien nor the owner of the underlying obligation. The mortgage instrument might be facially valid but substantively invalid in those cases.  Therefore, while the instrument might have been recorded and may look right, it may be memorializing a business transaction that never occurred.
 The current claimant has been illegally or inappropriately named if the business transaction did not occur. No value was paid for the underlying obligation if the business transaction did not occur. That means that the underlying obligation was never transferred despite wording that might be contained within the body of the assignment of the mortgage.  That means that the mortgage assignment is void as a legal nullity. And that means that the assignment of mortgage, and the mortgage lien itself, cannot serve as the foundation for a claim of foreclosure by the currently named claimant.
 You test for the absence of such a business transaction by sending a QWR, DVL and/or demands for discovery and litigation.  Remember that you should only accept corroboration from the named claimant. If the response comes from a company who has been designated or named as being the “servicer,” you should not accept that without receiving an acknowledgment from an authorized officer of the named claimant.
Keep in mind that most companies that are named as being a “servicer” are in fact not performing any servicing functions with respect to the receipt or distribution of funds received from homeowners.  A recent announcement by the CFPB identifies FINTECH  companies who actually perform functions relating to the receipt, deposit and accounting for payments made by homeowners. These companies have now been identified and labeled as “servicers.”
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Neil F Garfield, MBA, JD, 75, is a Florida licensed trial and appellate attorney since 1977. He has received multiple academic and achievement awards in business, accounting and law. He is a former investment banker, securities broker, securities analyst, and financial analyst.
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But challenging the “servicers” and other claimants before they seek enforcement can delay action by them for as much as 12 years or more. In addition, although currently rare, it can also result in your homestead being free and clear of any mortgage lien that you contested. (No Guarantee).

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2 Responses

  1. I am in the middle of this point with the Dept of VA that I ask my Senator and written to the President about the fact that Wells Fargo had file the Assignment of Deed of Trust saying the paid value for my loan, when in fact they never paid value for my loan with Washington Mutual Bank, The Assignment of DOT was signed Oct 22, 2009 and filed on Oct 29, 2009, saying that MERS working for the beneficiary in Great Western Bank and its successors transfer to Wells the legal holder of the debt,

    However, Great Western Bank sold the mortgage loan to Washington Mutual Bank on Jul 21, 2003, and never recorded an assignment and stopped existing on Sept 25, 2008, and JPMorgan purchase on that same day but did not purchase the 1.3 million WAMU Fed Gov Backed loans that the Mortgage Notes where physically separated from WAMU on Jul 31, 2006, when Wells purchased the servicing rights.

    As WAMU could not sell the mortgage loan as it did not have monies to repay the additional loan that the lenders/issuers take out against the “securities” that are required by Ginnie that these are paid to remove the mortgage loan from the MBS. because if the mortgage loan is released first the bank would run off with the underlying collateral without paying the investors.

    So Wells admits that they did not pay a value for my mortgage loan after they non-judicially foreclosed and write in there letter to me that in fact they were working for the investor owner of the loan in Ginnie Mae. Stop, Ginnie Mae is never the investor or owner of the mortgage loan or Ginnie MBS. Ginnie also writes to me that they don’t buy or sell any mortgage loan and is not an investor in MBS!

    Wells could not illegally foreclose and cannot foreclose for themselves in this matter as they don’t pay value and is why UCC9 is there to prevent fraud. Wells act as if it could replace itself in title as they were a co-party of the mortgage loan. One only has to provide the court of proof of purchasing the debt, but when not being able to provide proof then fraud will do!

  2. 1. Was told by the clown in the robe I could not raise the issue or object to any AOMs as the 3rd party to the transactions.
    2. The AOM was signed by NTC and Security Connections employees never by the Servicer, Investor, Owner , etc …
    3. How could SLS ever be assigned a mortgage as only the Servicer.
    4. How could US Bank NA Trustee for XYZ Trust ever be assigned a mortgage when US Bank NA says in a letter they have no ownership in the property.
    5. How can AOMs be assigned with the INCORRECT street address on all AOMs.
    6. When bought to clerks attention , they claim their only job is to look for the 4 CORNERS and Record. Yet say they INCORRECT address is a big problem that needs to fixed ASAP.

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