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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Dee
I just received a copy of the Assignment of Mortgage from the bank. On the Assignment it list as Mortgagor(s), my husband and I.
Problem is that this is an investment property and I am not on the loan. The only person that appears on the original note and all the mortgage docs. is my husband. What can I do about this? How can this be corrected since this property is in default. My husband is trying to have them do a loan modification on the property. Thank you for responding.
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Sara
If your name is on the deed, then the assignment will have your name on it as well.

If the property in question goes into foreclosure, you will also be listed to appear in court.

Hope this helps

s
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Dee

Thank you for your response. I thought that the only names that appeared were those on the mortgage note.

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Knows About Assignments
Dee:

I believe that the well intentioned response posted by Sara is an oversimplification.  Moreover, others in similar, but slightly different circumstances might also misinterpret this response.

In understanding the rights and liabilities under the note and mortgage, you need to appreciate the nuances of the rights granted by each.

Let us start with the existing ownership of the property.  Whether owner occupied or investor property, a key question is the ownership of the property as refelcted on the deed.  If your name is on the deed, you are probably a co-owner of the property with some rights in the transaction.  But in some states you might still have some valid legal claim as a wife to an interest in the property even if your name was NOT on the deed.

When obtaining mortgage financing, the lender typically requires an application containing representations of the borrower(s) as to the borrower(s) financial circumstances.  Most often, where more than one person is to be liable under a promissory note and/or mortgage, each person to be liable is joined on the application or makes a separate application.  While this is the convention, there is usually no legal necessity to do so.  But the identities of the applicants may be some indication and evidence as to the intentions of the parties.

When the application is approved and the loan goes to closing, the applicant who is to be liable under the promissory note is asked to execute the promissory note as a co-maker.  Those signing the promissory note are usually individually and severally liable.  EACH IS TYPICALLY LIABLE FOR THE FULL LOAN AMOUNT, BUT TAKEN TOGETHER ONLY THE FULL AMOUNT IS OWED.  A person who is NOT named on the promissory note and/or does not execute the promissory note would NOT usually be liable, UNLESS that person is (a) an indorsee and/or (b) a guarantor.  That is a person other than the maker can guaranty the loan and thereby become liable.

If you are (a) named on the promissory note and signed the promissory note, (b) a guarantor, or (c) an indorsee [a subsequent owner of the promissory note who endorses the note when selling it to another] you may be held liable for non-payment.  Otherwise, you are probably NOT liable for a default.

This area of the law is usually covered by the Uniform Commercial Code in most states.  Search for other discussion regarding promissory notes and the UCC in this Forum.

Finally, we come to the mortgage or deed of trust itself.  This is the mortgage security instrument which is used to pledge a property as security for the repayment of the loan, which laon is memorialized by the promissory note.

In most instances, the mortgage or deed of trust would have to name and be executed by each owner of a property as shown on the deed in order to give the mortgagee/grantee a valid right to foreclose and sell the property.  But one of the owners can also mortgage their own interests, including undivided interests, but in such an instance, only that individual owners fractional interest can be foreclosed upon.

Some examples serve to illustrate these ideas.

Suppose that A and B are married and A executes a promissory note, but B does NOT.  A is liable.  B is NOT, UNLESS B is a guarantor or subsequently owns the promissory note and sells it with an unconditional indorsement.

Someone suing under the note would sue A, but NOT B.  This is not to say that B is unaffected, as household assets might be subject to attachment, etc.

Suppose that A and B own Blackacre together as tenants by the entirety.  Suppose that A executes a promissory note for $100,000 as well as a mortgage pledging his undivided interest in Blackacre.  B does NOT execute either the promissory note or the mortgage.  (Usually a bank and mortgage company would NOT agree to this!)  In this instance, B could NOT be typically held liable under the promissory note.  Neither could the lender foreclose on B's interest using the mortgage executed ONLY by A.  If the bank forecloses, it gets ONLY A's undivided interest in the property and steps into A's shoes as co-owner of the property with B.

Now suppose that A and B own Blackacre together as tenants by the entirety, as described above.  Suppose that A executes a promissory note, but B does NOT sign.  But BOTH A and B sign the mortgage.  Under these circumstances, B is STILL not liable under the promissory note.  But B's interest IS subject to foreclosure upon A's default.  This works out to a sort of non-recourse guaranty, where A's liability is limited to A's interest in the subject property.

*

Now we come to assignments.  It is essential to understand that transfer of ownership of promissory notes under the UCC is by indorsement and delivery of the promissory note.  This is called a "negotiation", as in "negotiating a check".  Transfer of promissory notes is NOT by assignment.

Mortgages and deeds of trust, by contrast CAN BE assigned.  But the assignment is the transfer of the ownership interest in the underlying mortgage or deed of trust.  The character of the underlying mortgage CANNOT be altered by its subsequent assignment.

That is, suppose that ONLY A is shown on the mortgage.  An assignment showing the mortgage was by BOTH A and B could never ALTER the fact that only A had mortgaged his interest.  The assignment would just transfer the ownership of the lien, it would not ALTER the lien.

*

So you need to carefully review (a) the deed, (b) the promissory note, (c) the mortgage or deed of trust, (d) any known and/or recorded intervening assignments of the mortgage or deed of trust, and (e) any other contractual documents to include guarantees.

BEWARE!  Some unscrupulous mortgage originators might actually FORGE YOUR NAME to either the promissory note and/or mortgage even if you were NOT intending to be a co-maker or a co-grantor.

Also, be aware that some courts may look to the application and other ancilliary documents to determine the parties' intentions in the case of some later dispute asserting a clerical error.  For example, suppose that BOTH A and B made a co-application and jointly executed the promissory note, but due to an error, only A was asked to sign the mortgage.  The lender might ask to reform the mortgage to reflect the parties' intentions.  But most contracts will contain language showing that the contract supercedes all other preceeding discussions and written communications.  With a good lawyer, this may well be a point of leverage.

Finally, I would point out that lenders very often use mortgage modifications to obtain additional commitments or to correct prior technical defects.  By careful as to what you are agreeing should you enter a loan modification.  You may be surrendering important rights.

It would be BEST to consult an experienced real estate lawyer!  Hope this helps!! 
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The Equitable One
K double A,

That was good. Right up until the last line, LOL.

Finding affordable, knowledgeable and zealous counsel that works for defendants in foreclosures is difficult.

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Knows About Assignments
The Equitable One said:
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K double A,

That was good. Right up until the last line, LOL.

Finding affordable, knowledgeable and zealous counsel that works for defendants in foreclosures is difficult.


Bear in mind that I said it was "best", NOT that it was likely or even POSSIBLE!
 
Seriously, though, if a person is NOT named in the promissory note and did NOT execute the promissory note and/or is NOT named in the mortgage and did NOT execute the mortgage, even a pretty POOR lawyer ought to be able to mount a successful defense for this non-maker and non-grantor simply by reviewing his law school textbooks or even just reading the explanation on this page!
 
Unfortunately, there is a serious judicial bias against pro se litigants in most courtrooms throughout the country.  Without ANY other information as to Dee's ability to effectively represent herself, the recommendation to consult a lawyer seems important!
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Dee

Thank you so much for responding to my post. I tell you that this situation is stressful but I am so thankful that the more I research the more I am learning. I pulled the official documents for the property that were registered with my county and yes, under the Mortgage documents my name appears as well as my husband. This leads me to believe that the Assignment of Mortgage was filed based on these documents. I will keep everyone up-to-date on this matter. Thanks again.

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Knows About Assignment
Dee:

Take particular care to scrutinize the mortgage documents and your signature as it appears thereon.  Some really sleazy originators have been know to represent that only one member of the family need sign and then thereafter FORGE the name of the other person.

Bear in mind that a mortgage loan officer or a small originator may make thousands of dollars on each closing.  The incentive of individual employees to engage in fraud to assure that the loan closes and they get their commission can be enormous.

IF YOU KEPT COPIES OF DOCUMENTS FROM THE CLOSING, BE SURE TO COMPARE YOUR COPIES WITH WHAT WAS FILED! 
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