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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On my website,, I put chapter 9a from my California book on How to Fight to Save Your Home in California.  That chapter talks about my concept of arguing that the state owns the mortgage and note.  This is
critical in California because that is a non-judicial state and no one - no one is winning.  So, with the state now in the mix the odds may change.  Tonight, in Sacramento bankruptcy court, we are making this argument.  The moment
we said it, the trustee, who was totally opposed to our standing arguments, turned and said - "uh, that could really change things in California".  The judge's head turned and he took note that this is a major concept.  So, I have asked the Controller of the State of California to allow me to act as a special prosecutor to try to establish escheat for the state.  The idea being
that the banks lose, the state wins billions, and the state does the right thing by re-writing the notes to allow folks to stay in
their homes and pay a reasonable mortgage.
  Below, we provide a sample of this book, from Chapter 9(a), "Strategies".  You probably haven't heard of "escheat", but it is a legal principle.  It means that when a person dies without a will and without heirs, their property goes to the state - it "escheats" to the state.  In California, the Controller of the State of California, John Chiang, (P.O. Box 942850
Sacramento, CA 94250-5872, (916) 445-2636 Office (916) 322-4404 FAX) is responsible for escheated property.  Each state should have a government official responsible for escheated property.  We believe we have figured out how to make your mortgage escheat.  This could have tremendous advantages to you, and to your state.

     We believe that you - in fighting to save your home in California - can help save the State of California from bankruptcy and turn its economy into a raging powerhouse.  Why should a bank that has no right to steal your home, get away with taking it?  A note and deed of trust is property that could escheat.  So the State of California should own the note and the deed of trust, and then the State of California should do the right thing and re-write the terms of your mortgage so that you have an incentive to stay in the home and pay a new, affordable mortgage. 

     We have asked Controller John Chiang if George Gingo may voluntarily act as a special prosecutor for him in a particular bankruptcy case to try to establish that the property (note and deed of trust) has escheated to the State of California.   If he allows this to occur, and if successful, this could set the stage for the State of California to reap billions of dollars in mortgage payments.  Our fingers are crossed as we hope Controller John Chian takes George up on the offer.   If you'd like, you may call or fax the Controller and make that suggestion.

     You really need to read all 4 pages to get the gist of mortgage escheat.  


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First - "You probably haven't heard of "escheat", but it is a legal principle"  Wrong, it is an English common law doctrine.  Read all about it:

This scheme omits a few important caveats:  (1) you are dead, (2) you died without a will (3) you have no heirs (4) that the servicer sold your house for more then what was owed, and finally, if your house was sold for less then what was owed the servicer forgot to get a deficiency judgment.   Other then that it might work.  If it did work, and the surplus was turned over to the state by the servicer, then that state would hold the surplus in the name of the deceased.

So, if you know someone who has achieved room temperature you may want to check your state's unclaimed property website and see if their name is there.  Then the trick will be convincing the state that you are a long lost aunt or uncle of the deceased.

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It's totally new to me, this Chapter 9 BK for California. More details

This strategy is written by G. Gingo, a prominent Foreclosure Defense Attorney. It's new so we need to check it out carefully.
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William A. Roper, Jr.
Way To Go said:
This scheme omits a few important caveats:  (1) you are dead, (2) you died without a will (3) you have no heirs (4) that the servicer sold your house for more then what was owed, and finally, if your house was sold for less then what was owed the servicer forgot to get a deficiency judgment.

I think that what Mr. GINGO is trying to get at is the possibility that the ownership of a mortgage would revert to the state if the owner of the mortgage could not be identified or located.

Lets put this another way.  Suppose that you OWN a mortgage and you put the validly indorsed and delivered promissory note in your safety deposit box.  Regrettably, you become old and senile or you get hit by a truck and are not up to your usual attentive self.  You NEGLECT to pay the rental for the safety deposit box and cannot be located.  The safety deposit box is ultimately drilled.

The contents of the box would tend to be viewed as unclaimed property and, depending upon the laws of the jurisdiction might be turned over to the state for safekeeping.  Your name might find its way onto an unclaimed money list.

If you failed to EVER claim your property or failed to claim it within some reasonable period of time, this property would be escheated to the state.

Of course, in the case of a promissory note with a mortgage, there would also be a question about amounts past due.  If the borrower couldn't FIND the owner of the promissory note, it would be HARD TO PAY.  Limitations periods might pass as to certain of the unpaid amounts (usually six years).  But the state might be entitled to claim the remainder.

This seems to me to be an interesting but mostly academic argument, EXCEPT, perhaps, in states with singularly SHORT escheat periods.

It does serve to address the question of WHO OWNS THE LOAN when it was never properly indorsed and delivered and the original Lender is out of business and extinct!
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