Mortgage Servicing Fraud
occurs post loan origination when mortgage servicers use false statements and book-keeping entries, fabricated assignments, forged signatures and utter counterfeit intangible Notes to take a homeowner's property and equity.
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I hope you all had a good Holiday, I need to know if it is legal for your bank to assign your note after the fact that they had already filed foreclosure?
Any information would be great.
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I would say no IF you can demonstrate conclusively that the party claiming to be the “Real Party in Interest” was not at the time of the foreclosure.  It may be grounds for appeal if it was a judicial foreclosure.

Are you still in the house?  What state are you in? When was the foreclosure sale?  Who was the servicer?

Answers to the above questions will help the others here who I think will chime in shortly.   

 

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Joe B
Help-

     Way to go asked you some good questions. Timing of this assignment is quite critical, so I would like to ask similar, and perhaps clarify a point...

1. Are you saying that bank A (i.e. Bank of America) foreclosed, and then while in the middle of the foreclosure process, assigned the note to someone else (i.e. Bank of Ypsilanti)?

2. Or, are you saying that Bank A (i.e. Bank of America) foreclosed while Bank B (i.e. Bank of Ypsilanti) held the note, and then it was transferred to Bank A (i.e. Bank of America) after the foreclosure started?

3. Or, are you just talking about the folks that service the loan? (HomEQ, Ocwen, Select Portfolio Services, etc.)

     It is important that we are clear about what you mean in order to provide the kind of help you are seeking. It may mean something important, as Way To Go alluded, or frankly it could mean very little. So, it is important that we are clear about your situation. Any help you could give us to help you, would be great! Most folks here are very caring and want to help, so let us know...Good luck in your situation!

JB
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A Friend

Assigning the mortgage and note after the foreclosure process has started is VERY common. There are two banks that have stopped this practice, and I'm sure more will follow.

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Joe B. has the analysis CORRECT on this point!  One must distinguihs between various situations.  And one also must distinguish the same situations as these pertain to judicial versus non-judicial foreclosure actions.

One key issue is the plaintiff's standing to institute suit.  In order to have standing, the plaintiff in s judicial foreclosure proceeding has to have an economic interest in the alleged mortgage indebtedness at the commencement of the suit.  If the plaintiff did NOT have standing at the commencement of the suit, then the plaintiff is NOT entitled to bring and prosecute the suit, even if the plaintiif later acquires a right in the subject matter of the suit.    

This is NOT to say that the defendant is automatically entitled to avoid the alleged mortgage indebtedness when the plainttif lacks standing.  As in the various Ohio Federal cases, a case dismissed based upon lack of standing is most often dismissed without prejuduce.  This means that the same plaintiff might later REFILE this same suit.

On the other hand, suppose that A had a valid, proven and judiciacable interest in an alleged promissory note and the alleged mortgage.  A subsequent sale of the promissory note during this litigation to another diofferent party B would NOT preclude B from obtaining a judgment on the promissory note IF the purchaser was properly SUBSTITUTED as party plaintiff.

But upon sale without such substitution, the defendant could plead a defect in party plaintiff.  A plaintiff no long interested in the alleged mortgage indebtedness would NOT be entitled to recover.

There are obviously several other possible similar situations.
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Heres what happened:
 Bank B as Trustee for Bank A, filed foreclosure in Oct
At the time of filling there were no assings recorded any where.
 In Dec. Bank A then filed a Corparation Assignment of Mortgage to Bank B.
This is after we had already been in foreclosure since Oct.
I'm sure this is to show proof of Mortgage.
We are in Ohio
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Everyone else is dead on here from what I can tell, Help. I'll just throw my wooden nickels in for shiggles...

Based on what I'm reading it sounds to me like the Boyko, Rose, O'Malley rulings - only in this case there are months between the FC filing and the assignment recordation.

One important question that I haven't seen addressed yet. You mention the note holder (Bank A) and the Trustee (Bank B) indicating that your note has been securitized. Somewhere in the mix there should be an Entity C - the Servicer. It would be helpful, although not necessary at this juncture in conversation I don't think, to know who the servicer is - or at least for you to know who the servicer is.

Ultimately, if I'm correct in the assumption that your note has been securitized, you're going to want to get your hands on the prospectus for the trust that your note is in and you're going to want to go over the Pooling & Servicing Agreement with a fine toothed comb looking for, among other things, any kind of "additional servicing compensation" that the servicer is awarded per the PSA. Then you are going to want to go back and read your note - top to bottom - and find exactly what fees your note holder is allowed to charge you for and what fees the note holder is not allowed to charge you for.

But that comes after you get the foreclosure situation under control. The Boyko, Rose and O'Malley decisions are, I believe, available in the Legal Lounge of the Law Library on http://www.MSFraud.org . Might not be a bad idea to familiarize your self with those rulings and see how they compare to your own situation.
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Help:

Mike has further amplified the information very nicely.  If you are facing a judicial foreclosure under the circumstances you have related this icase is almost CERTAIN to be dismissed if filed in Ohio Federal Courts.  You will even find in the Legal Lounge a copy of a brief filed by one law firm on a plaintiff's behalf in at least one Federal case in Ohio.

If you are in Ohio state court it is essential that you properly plead the various defects associated with the plaintiff's complaint.

If you are represented by an attorney, you would be very well counselled to have our attorney contact me (or another of the experience participants in this discussion thread) OFFLINE via e-mail.  If you are unresprensented, You should probably drop me a note yourself, but please understand that while I CAN help with the facts in your case, I am not an anttorney and Not permitted permitted to give you legal advise. 
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Thanks all,
 After reading the legal lounge it is very clear to me that the same thing has happened to us.
Mike,
One important question that I haven't seen addressed yet. You mention the note holder (Bank A) and the Trustee (Bank B) indicating that your note has been securitized. Somewhere in the mix there should be an Entity C - the Servicer. It would be helpful, although not necessary at this juncture in conversation I don't think, to know who the servicer is - or at least for you to know who the servicer is.
It does state the servicer; This is how it reads:
 For value received , the undersigned  hereby grants, assigns and transfers to .....Bank A as trustee        ,Assignee whose current mailing address is
  c/o    Entity C ( the servicers address)  .
 As I stated before this is 3 months after the foreclosure has been started.
We are currently represented by an attorney. When I asked about this she didn't seem concerned? I know she is trying to be conservative. She stated she was not going to respond to this. Her goal is to get us to Mediation for a loan modification.
There have been numerous fraudulent things in our loan, but she doesn't seem to be pursuing any of them. While I understand she wants to get us a loan mod, our concern is can we pursue other issues if we sign a loan modification???
We are currently in a Ohio Court of Common Pleas,  in our county.
Thanks for all your information, just not sure how to proceed.
 We do want to save our home!!!!!!
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I would be willing to bet that any loan mod would also come with an indemnification clause (much like what Senator Clinton has proposed for mortgage servicers) effectively relieving you from any and all legal rights to ever go after anyone in any way associated with your loan.

If your atty is pushing you towards a loan mod and not even considering violations that may have happened over the course of your loan then I would HIGHLY suggest that you, at the very least, consult with a consumer protection specialist. http://www.martindale.com if nothing else.

Sorry, H... Went off on a tangent here. Please don't take this personally as it's just a general comment but one that I feel is too important not to make.

**Something that everyone should begin to realize with regard to seeking legal counsel is that more and more, law firms that are catching on to MSF, are taking cases - good, organized, win-able cases, pro hac vice. So don't be afraid to call into the next state, time zone, latitude or longitude to find legal counsel. The absolute worst thing that a law firm can tell you when looking for competent representation is "No." That's it. Me, I'm absolutely famous for making phone calls, in general, that I have absolutely no business making. But you'd be surprised where some of those calls get you. Unfortunately, Massry and Vittitoe (Erin Brockovich fame) had too great of a case load when I called them a few years ago. But I DID get several referrals out of them.

The bottom line is that, if you are a Mortgage Servicing Fraud victim, your house, your family, your financial, emotional, physical and psychological well beings are all on the table. No one, and I mean NO ONE, can or will help you more than you can help yourself. That means taking the time to actually learn what has been done to you and getting at least a rudimentary understanding of the process. There is absolutely no way that you can or should expect anyone, never mind legal counsel, to be able to comprehend a Mortgage Servicing Fraud case if you can't articulate the very basics of what has gone wrong in your case. If I've learned nothing else over the last 7 years I've learned that.
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Blazer

http://www.martindale.com  When we check this site, should we be looking at real estate or contract for a lawyer?

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srsd
You are so right Mike. Help, don`t do anything that will make you give up your legal rights. I am sure your credit has been damaged by these companies and that is going to follow you for a long time.
I haven`t heard of anyone that has had a successful loan modification....have you?  There is a thread on the board somewhere that people was talking about the loan mods and it seemed like they ended up in aworse deal than what they had or they would get part of the way into the mod and the company would turn them down.
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Blossom
If HR 4178, the Emergency Mortgage Loan Modification Act of 2007 becomes law it will provide an indemnity “safe harbor” from Truth In Lending Act and other laws, allowing lenders and servicers to restructure subprime loans in default or where default is imminent with no recourse for lender errors, omissions, misrepresentations or....... mortgage servicing fraud.

http://www.websitetoolbox.com/tool/post/ssgoldstar/vpost?id=2352826

STATUS: Introduced Nov. 14, 2007 and referred to House Committee on Financial Services.

PROSPECTS: Iffy. The bill was intended to encourage loan servicers — like those participating in the Bush administration’s HOPE NOW alliance — to engage in workouts without fear of lawsuits from investors. But Bush administration officials, including Comptroller of the Currency John Dugan and FDIC Chairwoman Sheila Bair — say the bill could undermine confidence in the secondary mortgage market and question whether it could withstand legal challenges.  http://yourdesignservices.com/client/mwg/?p=44

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Lets step back for a moment before we suggest a blanket condemnation of loan modifications.  For those burdened with a soon to adjust ARM, who have been chugging along just fine with their current payment, and who clearly will go into a financial tailspin when their rate adjusts upwards, are clearly the best candidate for a loan modification. This is assuming their loan can in fact be modified pursuant to the terms of the PAS.

 

Chances are if this group of borrowers are afforded an opportunity for a modification, then that modification will have a very broad release.  Is this an example of a servicer and/or investor being optimistic?  Yes.  However, if a borrower can afford to remain in their home with a modification, at the cost of giving up their rights to sue, may be the best option.  This is especially true if they have equity.

 

The likelihood of being granted a loan modification is based on several factors: (1) If the borrower plans ahead and formally (in writing) applies for a modification long before they reach the possibility of default.  (2) The Pooling and Servicing Agreement (PSA) that contains their loan does not forbid loan modifications, (3) the modification is limited to a rate freeze or reduction to the previous rate. And (4) the borrower can clearly demonstrate they have the financial ability to successfully meet the modified terms.

 

This not to say that a borrower should not try for a post-default modification, they should.  And remember that giving up your right to sue in return for a modification that allows you and your family to remain in your home may not be a bad trade-off.  

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Originally Posted By Blazer
http://www.martindale.com  When we check this site, should we be looking at real estate or contract for a lawyer?


The answer to this question is wholly dependent on the nature of the legal problem you are facing!  If you have a problem related to property title or the sale of a property, you may need a real estate lawyer.  If you are generally in default because you are unable to pay your mortgage loan, you may need a consumer debt / bankruptcy lawyer.  If you are having problems with mortgage servicing fraud, you may need an experienced litigator.  You may even find that you need different lawyers at different stages of a litigated matter.  BE PARTICULARLY CAREFUL in selecting a lawyer.  Very often, you may briefly confer with a lawyer at no charge BEFORE committing and paying a retainer.  If you are in doubt, I would consider meeting with more than one lawyer to interview various prospects. 
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A Friend

Help wrote:
Thanks all,
 After reading the legal lounge it is very clear to me that the same thing has happened to us.
Mike,
One important question that I haven't seen addressed yet. You mention the note holder (Bank A) and the Trustee (Bank B) indicating that your note has been securitized. Somewhere in the mix there should be an Entity C - the Servicer. It would be helpful, although not necessary at this juncture in conversation I don't think, to know who the servicer is - or at least for you to know who the servicer is.
It does state the servicer; This is how it reads:
 For value received , the undersigned  hereby grants, assigns and transfers to .....Bank A as trustee        ,Assignee whose current mailing address is
  c/o    Entity C ( the servicers address)  .
 As I stated before this is 3 months after the foreclosure has been started.
We are currently represented by an attorney. When I asked about this she didn't seem concerned? I know she is trying to be conservative. She stated she was not going to respond to this. Her goal is to get us to Mediation for a loan modification.
There have been numerous fraudulent things in our loan, but she doesn't seem to be pursuing any of them. While I understand she wants to get us a loan mod, our concern is can we pursue other issues if we sign a loan modification???
We are currently in a Ohio Court of Common Pleas,  in our county.
Thanks for all your information, just not sure how to proceed.
 We do want to save our home!!!!!!

That is very very very common in Ohio. IF a case was dismissed because of the lack of an assignment, the FC law firm would simply get the needed assignment and refile the case.
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Ohio
If your attorney's goal is obtaining a loan mod...what pray tell will be her next step when the loan mod is constructed with terms clearly to your disadvantage?

And you can bet the farm that the terms will be to your disadvantage.

First they will capitalize the unpaid interest and add it to your unpaid principal balance, same thing with any advanced escrow, attorney fees, late fees, inspection fees etc. All of this will be tacked on to the mortgage balance and amortized according to this new balance. The maturity date of the loan will probably not change.

The interest rate may change and it may not, they may offer a fixed rate or keep you in an ARM.

You will emerge with a higher loan balance, a higher monthly payment and a lot less equity...if any.

You will undoubtedly have to admit default and agree the loan modification serves as settlement of all claims.

It will save your home but at a high price.

If you have legitimate claims and real affirmative defenses to the foreclosure a counter claim should have been filed.

I am surprised your attorney chooses to go into this mediation with no ammunition...no leverage that could result in a fairer outcome.

This is assuming they will agree to a loan mod......What is plan B should they deny your request?

I fear for the outcome of your situation. You have to keep in mind that the foreclosure process in the courts will not stop despite attempts at mediation. The court date WILL arrive and I fear it will arrive with an empty handed defense.

Unless you nail them with the goods now and put them on the defensive you may lose your chance to do so later. You will not be able to bring these things up in court for the first time the day of trial.

Hopefully someone can chime in here and help me explain this better... 


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