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
Hi,

I would first like to say Thank you to all who post here with the information. If it was not for websites such as this one I would be lost.

I need some information urgently on the following issue. I had a call from the bank that holds my second mortgage stating that they cannot track my first mortgage and they are claiming that the first mortgage is a fraud. According to this manager when they did a Title search on the property the registered owner is Argent who I refinanced with back in 2003. No other banks show up as owners of the mortgage. I am currently paying my mortgage, have been since 2003. Can someone explain to me please.....what if The fist lien holder never filed the assignment and this is going back to 2003, do they legally own the loan? Please help.

Thank you all..     
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If I were you, I would send a Qualified Written Request to the servicer for your first mortgage asking who is the noteholder and requesting a copy.  It could very well be that MERS is on the mortgage or the mortgage was transferred to MERS.

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Dee
Thank you ALina. Who is MERS. I just went to the records for my county and look what I found. It states that on 1/09/09 Citibank files as Attorney In fact for Argent an Assignment of Mortgage. I thought that Argent was out of business.

I cannot make sence of this.

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Moose
Dee wrote:
Thank you ALina. Who is MERS. I just went to the records for my county and look what I found. It states that on 1/09/09 Citibank files as Attorney In fact for Argent an Assignment of Mortgage. I thought that Argent was out of business.

I cannot make sence of this.



First question - MERS is Mortgage Electronic Registration Systems. It is a "proxy" system that lets the industry avoid payment of county recording/filing fees when a mortgage is transferred from one party to another. The idea is that a MERS number appears on the county records and the loan can be sold as many times as they want without recording it because MERS is the alleged "owner." To find out who actually has it, you have to know the MERS number and have access to someone who can look it up (it's not public information). It's also a clever way to conceal who really is the party to have standing in a foreclosure and some state courts have ruled that MERS cannot be a legitimate party. In those cases, another assignment has to be filed by the servicer/trustee/agent to get MERS out of the picture.

Next question - this of course isn't legal advice but Argent's assets were part of Citi's acquisition of (AMC) Ameriquest which took place back in August of 2007. It looks like Citi finally got around to getting the documents filed in your county to assign the mortgage away from Argent and I'm guessing based on what you wrote about MERS that it's been assigned to MERS.

Citi is apparently still the servicer. You can send them the RESPA QWR letter to find out if they are still the note holder but chances are they will say they don't have to tell you.

Hope that helps.

Moose
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The Equitable One
Moose,

They may say that, that they don't have to tell, but what is the fact of that? I thought "they" have to answer QWR.
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Moose
The Equitable One wrote:
Moose,

They may say that, that they don't have to tell, but what is the fact of that? I thought "they" have to answer QWR.


They have to acknowledge the letter and then respond, but they will more often than not claim the information is confidential and/or they are contractually bound to not reveal it. The fact is, they don't want borrowers contacting the Trustee and most Trustees aren't equipped to deal with contacts from borrowers.

Moose

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Knows ABout Mortgages
It seems to me that you are allowing the 2nd mortgage holder to get you spun up over NOTHING.

IF you borrowed money from the 1st mortgage lender ad executed a promissory note and mortgage or deed of trust security instrument, then you are presumably liable under the promissory note UNLESS you can show some significant fraud or TIL violations, etc.

The mortgage you then signed would under the common law be the senior lien on the property, if there was then no other mortgage indebtedness outstanding.  Under the common law, the rule is "first in time, first in right".

But thecommon law is displaced in MOST states by so-called recording acts which come in a variety of flavors but most notably include "race", "notice" and "race-notice" rules.  You can probably find good explanations of each elsewhere on the Internet and the distinction is relatively unimportant here, absent more facts.

Generally, the recording acts impose some duty on a mortgagee or grantee of a deed to record the instrument to "perfect" the instrument and place the public on notice of a convyance of interest in a property. 

Bear in mind that the recording acts of most jurisdictions usually do NOT set forth that recording is required to give the instrument effect, but rather assists in determining lien priority based upon the recording.

IF you gave the earlier lender -- the mortgagee -- a valid mortgage interest by execution of a mortgage or deed of trust, the validity of the instrument would NOT usually be altered by a failure to timely record, BUT the earlier lienholdholder COULD lose its priority if it failed to record.

This is NOT generally true of a failure to record assignments.  The lien priority is generally based upon the first in time first in right rule as modified by the recording acts.  Failure to record an assignment MIGHT cause a lose of priorityamongst those with competing clais to a particular mortgage.

For example, suppose that ABC Mortgage grants a first mortgage loan to SMITH secured by Blackacre and then sells the loan to IJK Investments.  ABC endorses and delivers the promissory note to IJK and executes an assignment of mortgage in favor of IJK.  Now suppose that IJK FAILS TO RECORD ITS ASSIGNMENT.  Further suppose that ABC FORGES another promissory note in SMITH's name and sells it to XYZ Investments.  ABC again endorses and delivers the FORGED promissory note to XYZ and executes another assignment of mortgage in favor of XYZ.

XYZ THINKS it is buying the REAL LOAN.  If it made reasonable inquiries, it might very well find that SMITH admits borrowing money from ABC, but SMITH knows NOTHINGof the subsequent sale to IJK, as ABC continues to SERVICE the loan.  IF XYZ checks the county records these seem to still reflect that ABC is the record owner of the mortgage and therefore presuably still owns the promissory note.

The recording acts assist us in ascertaining WHO owns the valid lien on Blackacre.

This is really rather perverse example, because under the facts shown above IJK owns the REAL promissory note and would seem to be entitled to payment.  XYZ owns a forgery, HOWEVER, IJK's failure to timely record the assignment may very well mean that it has lost its interest in the mortgage to innocent purchaser for value XYZ,which DID timely record its interest.

It is axiomatic that SMITH cannot be held liable under both the original promissory note and the forgery and would be entitled to a discharge upon payment in full of the valid promissory note.

The example shows the MESS that can result when an assignment is NOT recorded!

*

The KEY idea for this thread though is that absent some collusive fraud on the part of the borrower and the original lender, the 2nd lienholder is NOT generally going to be able to ADVANCE its priority based upon a failure to record the assignment.  But it MIGHT be able to advance its priority based upon failure to timely record the original mortgage. 

While I have seem MANY instances in recent years where intervening assignments are NOT recorded, at some peril to the MORTGAGE INVESTOR it is VERY RARE for a mortgagee to fail to record its mortgage security instrument.

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In the end, you may want to just ask the 2nd lienholder:

  • What is it that you are alleging?
  • If I timely pay both my first and second mortgages, WHY do I care what your priority is with respect to the original lienholder?  (this would NOT seem to be your fight!)

IF you find yourself unable to pay EITHER mortgage, you will find that the entity you are unable to pay may have a right of enforcement and an ability to initiate foreclosure.  The lien position will then primarily affect the rights to the proceeds of a foreclosure sale.  Understanding the relative position IS important in seeking a workout.  GET THE FACTS.  Then apply the law.

As Moose says, "your mileage may vary".  IF you are in default, consult an attorney.  IF you are making your payments, try to ascertain the facts, but this (determination of priority between 1st and 2nd lienholders) really doesn't seem likely to be YOUR FIGHT. 
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Knows About Mtges

Those interested in discussion of potential borrower double liability would also be well counseled to read the portions of the decision in 5-Star Mgmt. v. Rogers relating to the "default rule".  See 5-Star Mgmt. v. Rogers, 940 F. Supp. 512, 1996 U.S. Dist. LEXIS 15018 (E.D.N.Y. 1996).  See also the post "Separation of Note and Mortgage".   

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Dee,

You need an attorney ASAP!  If you live in CA and the first you have involves MERS, you need an attorney.  Go to the county recorder and get a copy of all documents from 2002 to present.

I am currently involved in a case against B of A for fraud, illegal foreclosure, and 10 other complaints, filed in federal court.  You would be amazed at what the banks are doing and the mass amounts of fraud that is taking place.  Corporate America learned nothing from Enron and the many other fortune 500 companies of past, they just learned how to hide it better.

Many others have given you solid advise and information regarding your post.

MERS and other bank institutions have helped defraud our counties of million of tax dollars

GET AN ATTORNEY!!!!!!!    

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Ginger
Dee, I would like to add that while there are many other Web sites about mortgage and foreclosure fraud, you would do well to stick to this site for the guts of any related fraud issues. It's good that you are proactive. I realize that you are not in default, and it's good to stay that way, but if you want facts and case law to back up the facts, stay put with msfraud.org. No sugar coating here. I am extremely grateful for the help I have found on this site. If one searches the forum's past and present posts and comments, I venture to say that most of the pertinent facts have been discussed from many angles. And the posts keep up with current changes in the courts. EXCELLENT!
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Ginger
What I wrote above is only my personal opinion. I did not mean to imply that this site can substitute for legal advice, but an informed client is usually a good client and that sometimes can enhance the client/attorney relationship.
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William A. Roper, Jr.
You folks seem to have chosen a two year old thread to urgently recommend to Dee the advisability of obtaining an attorney.  If Dee is now still in her home two years after these posts, she is probably doing pretty WELL and might have some tips for others.

If Dee has already lost her home, rushing out to get an attorney in 2011 in respect of a 2009 foreclosure seems to me a little tardy!

I also want to encourage Dee to wrap up her Christmas shopping from 2006 if she hasn't already done so.
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