Livinglies's Weblog

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But I agree that theoretically creates a gap.

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If the lien remains and the same creditor claims a right to enforce a debt, then that creditor can go after the same debtor, this time simply by changing a label: from debtor to owner. So to save the property, the Owner must pay off the demands of the purported lienholder. This is something that could be raised de novo. It has always been an inherent conflict.

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In addition, the discharge probably DOES extinguish the note but not the lien, even under current law. The note and the underlying obligation are said to be merged upon the maker of the note executing that instrument. Since the debt is discharged (i.e., it cannot be enforced against the debtor), it should be argued that since the note is only evidence of the debt and not the debt itself, the note has been discharged. This causes no prejudice to a party who owns the underlying debt and whose right to foreclose is already preserved.

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So the attempt to foreclose AFTER DISCHARGE could only be supported by proof of ownership of the underlying unpaid alleged loan account receivable WITHOUT RELIANCE ON THE NOTE. Proof of ownership can ONLY be payment of value (or proof of a gift). Keep in mind that the transfer of a note that is already claimed to be in default does not allow for the treatment of the note as a negotiable instrument (Article 3 UCC). Once again, the proponent must prove ownership of the underlying loan account.

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Neil F Garfield, MBA, JD, 76, 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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FORECLOSURE DEFENSE IS NOT SIMPLE. THERE IS NO GUARANTEE OF A FAVORABLE RESULT. THE COMMENTS ON THIS BLOG AND ELSEWHERE ARE BASED ON THE ABILITY OF A HOMEOWNER TO WIN THE CASE NOT MERELY SETTLE IT. OTHER LAWYERS HAVE STRATEGIES DIRECTED AT SETTLEMENT OR MODIFICATION. THE FORECLOSURE MILLS WILL DO EVERYTHING POSSIBLE TO WEAR YOU DOWN AND UNDERMINE YOUR CONFIDENCE. ALL EVIDENCE SHOWS THAT NO MEANINGFUL SETTLEMENT OCCURS UNTIL THE 11TH HOUR OF LITIGATION.

But challenging the “servicers” and other claimants before they seek enforcement can delay action by them for as much as 14 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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