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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Hello MS Fraud forum: I am amazed at the information on this site.I thank everyone against these criminals and the genuine information shared.  I was forced into a bankruptcy several years ago and upon my discharge and a successful BK I notified all three main credit reporting agencies that I had completed my case and was awarded a positive discharge. I notice on several of my credit reports that my reports have a balance of $0.00 on my mortgage balance and $0.00 on monthly payments.Also my mortgage servicer sent me a 1098 form for a certain year that has a $0.00 principle balance and then the servicer sent me a letter and another 1098 for this certain year saying the previous 1098 was not correct regarding their identity number and the second 1098 was a correct and true copy and it also has a $0.00 on the principle balance.

When my mortgage was moved to a different servicer I was not notified by my old servicer that it was being transferred to the new one. I was only notified of the transfer by the new servicer that it was being transferred. I wanted some information a few years back from my old servicer on my mortgage and was told by them to contact the originator of my mortgage for the information and I did and was told they no longer exist and that particular loan number I gave did not match with any of their records on my mortgage.

When I filed BK several years ago I demanded a copy of my promissory note and mortgage. My old servicer sent me a faded out copy of the promissory note and on the top right hand corner of the note clearly the original notary signature was forged and stamped on the upper right hand corner. I have a copy of my original note and it has nothing on the upper right hand corner.  Also at my local courthouse there is nothing on the records except the mortgage as it was filed when my mortgage originated with the originating bank on it that no longer exist.  I was told that it seems this debt was discharged in my BK and the servicer has been collecting by fraud.

I smell a fish because I have been after the original note to preview for over almost 8 years with no luck.

Anyone with any ideas please?

Thank you for your time.

MSF Fan
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PeterK
A discharge in bankruptcy discharges the obligation imposed by a note, but never also discharges the mortgage lien or lien created by a deed of trust.

One of the common myths perpetrated by debt elimination scam artists is that the bankruptcy also entitled you to a lien discharge.

Since the mortgage lien is not discharged, you are then presented with a choice as to whether to timely make the required monthly payments and KEEP YOUR HOUSE or whether to default on the mortgage and LOSE YOUR HOUSE.

Scam artists and swindlers at this and other similar sites will often try to sell you various useless pleadings, motions, reports and other scam products promising that you can clear the lien using a quiet title action. This is one of the many variants of the "quiet title scam".

If you fall for this scam, you will soon find yourself out of pocket for any money you pay the swindlers and they attorneys who are confederates in this scam, as well as the costs incurred by the lender in defending against the quiet title suit. The lender is expressly entitled under the terms of the mortgage or deed of trust to employ a law firm to defend against this type of suit and then to simply add the cost of their law firm to your monthly mortgage bill. When you fail to immediately pay their lawyers' costs, the lender will declare default, accelerate the balance due on the mortgage and foreclose.

Best of luck to you!
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texas
If no note, debt obligation, then what is the mortgage attached and perfected too?
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Rod
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If no note, debt obligation, then what is the mortgage attached and perfected too?

Texas, if you are at all confused about this, you need to read some bankruptcy law cases. There are simply no circumstances where a discharge of secured debt in a bankruptcy proceeding also results in the discharge of the mortgage lien.

This isn't an area of unsettled or questionable law.

Those who are posting otherwise are simply drawing people into the scams!
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texas
Who said it was secured in accordance to state law.
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Thank you for your responce PeterK.

Thing is I checked with my late BK Firm and my mortgage was filed as an unsecured debt because the Mortgage servicer could not prove that  it was a secured mortgage debt by showing them the original wet ink promissory note. I could have accepted a copy from the crooks to attach to my case to satisfy me but I rejected it because I convinced my BK Attorney that  my original promissory note as signed when the note originated has been sold off to investors and no telling who could down the road show with the original claiming the alleged debt against me.Also in the middle of my BK I shared my concerns with my BK Attorney that I suspect my servicer is up to no good by secretly building late charges against me and they would most probably try to take my home after my discharge. My BK Attorney thought I was just being paranoid but I pushed and finally he told me to request a payment history from them which they completely ignored my request.

So my BK Attorney got a court ordered subpoena for them to produce a payment history on my account and then they had no choice but to produce it.My BK Attorney contacted me and I went to his office and he made copies of my payment history and told me to go over it and highlite any errors I thought there may be and so I did. I went over my servicers payment history and indeed my suspicions were verified and it completely shocked my BK Attorney at what the crooks were doing even when my mortgage was being payed by my BK Trustee. My servicer had over $3000.00 in late fees pending and it even showed in my payment history where they received my trustees payment before the due date but they would not post the payments until after my 15 day grace period.

I dictated a letter and my BK Attorney blasted my servicer with the facts of my discovery and my BK Attorney forced my servicer to correct their fraud and even told the servicer if they didnot correct the problem they could be held accountable for federal crimes.My servicer did correct it and refunded to me what they were going to default me on after my BK discharge. I am still in my home and they will be held accountable if the servicer violates my recent respa to them and also they will either give me what the mortgage contract says must be produced upon payoff or I will be countersuing them for the many years of payments and interest and insurance and that my friend is my right. A contract is a contract and servicers will hold the alleged borrowers to the contract in every detail and in fact will do everything in their power to default the borrower so they can further profit. No mortgage elimination scams are just that scams and I will pay mine off soon and when I do they will either produce what the contract says or they will be sued for breech.Im really looking forward to my day in court with the crooks. Thanks again PeteK
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texas
Queit Title, why when there is a Trepass to Try Title.
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texas
stated "who profits from promoting the scams!"

Speak not what you do not know the truth about!
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Buster
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Make sure to do some research even in advance of hiring a lawyer about your entitlement to legal fees. In most places, you will find that you cannot recover your legal fees in an action of this sort. There are a handful of exceptions. In a few states, statutes have made bi-lateral the one sided contract provisions entitling a lender to attorneys' fees in the event of a breach. In other states, particular causes of action can give rise to a right to legal fees, even when most litigants cannot get these without a contractual provision in their favor. I think you will find, for example, in Texas that if you sued for a declaratory judgment, you would be entitled to attorneys' fees, but if you sue for Quiet Title you could never get attorneys' fees. The scam artists and the scum attorneys with who they conspire don't even know this and don't care, because none of their victims ever wins the case and entitlement to attorneys' fees simply doesn't matter! The scam artist just want your up front cash in support of their swindles leaving you with noting but a hole in your pocket.

I checked and Oliver is at least correct about recovery of attorneys' fees in Texas. When suing under Chapter 37 ("Declaratory Judgments Act") of the Civil Practice and Remedies Code, a plaintiff (borrower) could be entitled to recovery of attorneys' fees pursuant to Tex. Civ. P. Rem. Code 37.009:

http://www.statutes.legis.state.tx.us/Docs/CP/htm/CP.37.htm#37.009

Suing for Quiet Title, a plaintiff wouldn't be entitled to attorneys' fees.

This person posting as Texas doesn't seem to know the difference between a Quiet Title and a Trespass To Try Title suit. In Texas, under the facts presented by Concerned American, the correct cause of action at the conclusion of the payments to get a court ordered discharge of the deed or trust would be a suit for declaratory judgment.
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MSF Fan
Thanks Oliver for your post.

For one I am not looking to get a mortgage elimination.I am simply going to make sure my mortgage contract is enforced upn my payoff. Also on county recorder of mortgages in my local court house the mortgage lays as it did almost 20 years ago with only the originator bank that has been out of business since 5 years after my mortgage was originated with no-one else showing to be assigned. I had a title search done by a professional title search company across the road from my local court house and he being a real estate attorney also told me that the only one showing to be owed after his exhaustive title search on my property is the originator who dont even exist no more.

I have the transfer notices where all past servicers along with my present servicer is supposed to of had the rights to collect the alleged debt.Tell me Oliver why cant no assignments be found for the ones that have serviced my mortgage? Tell me Oliver if a signed notarized mortgage contract says something is to be delivered to me upon payoff and it cant what makes some people think the borrower has no right to sue for a breech of their mortgage contract? 

One more time:If a mortgage servicer (I.E. Pretending note holder) has a right to sue the borrower when the borrower allegedly defaults then what makes some people think the borrower cant  sue the mortgage servicer (I.E.Pretending note holder) for a breech of a mortgage contract when they cant deliver to the borrower what the contract says?

Also when you send your mortgage servicer a QWR and the completely ignore your request do you still have a right to see the law enforced?

I was told not even to try and stay in my home over 8 years ago because they would take it regardless.I am glad I did listen to them and I proved the nay sayers wrong.When I am determined to do something I see it through one way or the other.

Again thanks for your post oliver.

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Sanjay
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One other caution is in order in regards to the "show me the note" argument. I really don't like posting this because it undermines some other valid legal arguments available to borrowers, but "show me the note" is also a well worn scam. If you actually look at a copy of your note, one of the provisions is going to be a waiver of presentment. It appears in virtually every mortgage note in the United States.

I checked my note and it contains language of waiver as Oliver said it would within paragraph 9:

"I and any other person who has obligations under this Note waive the rights of Presentment and Notice of Dishonor. “Presentment” means the right to require the Note Holder to demand payment of amounts due. “Notice of Dishonor” means the right to require the Note Holder to give notice to other persons that amounts due have not been paid."

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Presentment is the physical presentation of the note to the borrower to show that the holder is entitled to payment. Without the waiver, the lender might have to present that note upon the borrower's demand in respect of each and every required payment. This is commercially uneconomic and thus the waiver. With presentment, the holder is never required to actually produce the note in order to demand payment, even at discharge!

But I am unsure that presentment really means what Oliver says it means since the term is defined in my note to mean:

“Presentment” means the right to require the Note Holder to demand payment of amounts due.

Does anyone know whether Oliver is right about this? I bought the pleadings to file a Quiet Title suit at another site for $2,000 and so far have paid my attorneys $12,000 in litigation expenses. Also, I got a bill from my mortgage company saying that I have to pay their legal fees with my next loan payment. I am in California. They wouldn't show me the note when I demanded it so I bought the pleadings and filed suit with a law firm which is approved by Clouded Titles.
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Edwin
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Also on county recorder of mortgages in my local court house the mortgage lays as it did almost 20 years ago with only the originator bank that has been out of business since 5 years after my mortgage was originated with no-one else showing to be assigned. I had a title search done by a professional title search company across the road from my local court house and he being a real estate attorney also told me that the only one showing to be owed after his exhaustive title search on my property is the originator who dont even exist no more.

Even if you insist that you are not being victimized by a debt elimination scam, you are posting themes from the myths perpetrated by debt elimination scam artists.

One of the central myths is that the dissolution of the mortgagee of record would effect the discharge or release of the lien. This isn't true in any state in the United States and is totally incompatible with the law everywhere.

There are several enormous holes in this myth. First, an argument used in other contexts in foreclosure defense shows the vacuity of the argument. The equitable right to the mortgage or deed of trust follows the note automatically upon negotiation. Thus, there is an equitable owner or entity with a right of enforcement that may be different than the holder of the legal title to the mortgage or deed of trust. The owner of the legal title may also be different than the record owner.

Historically, mortgages or deeds of trust were assigned by physical delivery of the original mortgage to the new note holder. With the statute of frauds, a written conveyance of the mortgage was also required.

The written conveyance of the mortgage (assignment) conveys the legal right of enforcement. But the mere negotiation of the note carries with it the equitable right of enforcement.

Thus, in a modern setting, there may be a record owner of the mortgage, usually the original named mortgagee, possibly an owner of legal title in respect of the physical delivery of the original mortgage and/or written assignment, and an owner of the equitable title.

The owner of the equitable title is entitled under the law to the assignment of the legal title to the mortgage. This can be done by adding an equitable count to a complaint in a judicial foreclosure state to establish the legal right to enforce the mortgage in favor of the holder of the equitable right. Many courts have muddled this and the foreclosure mills have always preferred to simply forge the required assignment rather than seeking to reestablish the legal right in the entity with the equitable right of enforcement.

The point is that the right of enforcement doesn't disappear or become extinguished. Rather, it merely requires additional legal mechanics.

Moreover, under the laws regarding escheat, in almost every state property that is found to be abandoned is typically escheated to the state. Thus, if it were actually true that the dissolution of a corporate entity left the legal right to the ownership of mortgage in doubt, then at best this right would be escheated to the state where the property was located rather than extinguished.

There is simply no legal validity to the idea that a mortgage is extinguished by an entity going out of business. NONE. This is a central myth of many debt elimination scams and your post shows that you have been taken in by this myth!

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I have the transfer notices where all past servicers along with my present servicer is supposed to of had the rights to collect the alleged debt. Tell me Oliver why cant no assignments be found for the ones that have serviced my mortgage? Tell me Oliver if a signed notarized mortgage contract says something is to be delivered to me upon payoff and it cant what makes some people think the borrower has no right to sue for a breech of their mortgage contract?

Transfer of servicing is different from transfer of the mortgage or deed of trust. There is no legal requirement in most states that an assignment be recorded in order to be legally effective. This is another of the myths perpetrated by the debt elimination scam artists.

What is it that you think your contract says is to be delivered to you upon payoff. Why don't you post the language so that we can discuss this. I am unaware of any such language in any instruments in standard use in the United States. If you have such language in your instrument, post it and share it with us.

You also need to realize that the fact that the mortgage instrument is "notarized" is unavailing. It is of almost no legal consequence at all. Notarization is not typically required to give the instrument legal effect in most states. Notarization is merely required to make the instrument eligible for recording. Moreover, note that the mortgage is NOT in fact ever signed by the mortgagee. It is ONLY signed by the borrower/grantor. Thus, the mortgage is actually NOT a contract in the traditional sense. It is instead what the law regards as a unilateral undertaking. YOU have bound yourself in respect of the mortgage. The lender hasn't signed and isn't bound AT ALL. The borrower is only constrained by the express language of your unilateral grants!

What is the breach you are complaining of? If you think there is a contract and you think there has been a breach of the contract, why don't you spell out precisely how the contract has been breached?

I am NOT arguing that you haven't been injured or harmed. But I am merely pointing out that if you cannot articulate in any more meaningful way what you think your legal cause of action is, then your case is absolutely going to be thrown out of court! A successful suit starts with a valid legal theory and specific plead elements showing a basis for relief. I don't see where you think you are going.

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One more time:If a mortgage servicer (I.E. Pretending note holder) has a right to sue the borrower when the borrower allegedly defaults then what makes some people think the borrower cant sue the mortgage servicer (I.E.Pretending note holder) for a breech of a mortgage contract when they cant deliver to the borrower what the contract says?

What is it that you think the servicer has failed to deliver?? You can sue the servicer if you like, but it helps to identify the cause of action that would form the basis for your claims! What is it that the servicer has failed to deliver to you? Look in the mortgage instrument and identify which paragraph supports your claim!

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Also when you send your mortgage servicer a QWR and the completely ignore your request do you still have a right to see the law enforced?

If the servicer fails to answer a QWR, then perhaps you have a valid cause of action under RESPA. You might even be able to recover $1,000. But a RESPA violation would never excuse payment of the amounts due under the mortgage or preclude the owner of the equitable title to the mortgage from foreclosing.

Moreover, in seeking to make a RESPA claim, you are creating a rather daunting dilemma and contradiction for yourself. If the servicer is actually a stranger to the note and mortgage, then there cannot possibly be any RESPA violation, as a stranger would have no duty to answer. Only if the servicer is really the agent of the mortgagee would the servicer have any duties under RESPA. So if you prevail on your RESPA claim, this can only be as a consequence of an admission that the servicer had the authority after all!

Look, all of these debt elimination scam myths are hollow! This is just a pretext to defraud distressed borrowers orchestrated by many of the very same con men who were peddling subprime loans during the bubble.
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MSF Fan
Very good post Edwin.

Ever heard of some states have what is called mortgage reinscription civil law for a mortgage to stay valid after a period of 10 years has elapsed? The state I live in has such laws and my mortgage was never reinscribed.It is recorded just as the originator of my mortgage had it recorded and they went out of business 5 years after my mortgage was closed.My previous servicer would it seems to have reinscribed my mortgage when the 10 year time limit elapsed which they failed to do and it would have been to late for my current corrupt servicer to reinscibe my mortgage since it was transfered to them way after the 10 year time limit.

Lets have your opinion on this one. [smile]

Thanks. MSF Fan
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MarkS
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Very good post Edwin.

Ever heard of some states have what is called mortgage reinscription civil law for a mortgage to stay valid after a period of 10 years has elapsed? The state I live in has such laws and my mortgage was never reinscribed.It is recorded just as the originator of my mortgage had it recorded and they went out of business 5 years after my mortgage was closed.My previous servicer would it seems to have reinscribed my mortgage when the 10 year time limit elapsed which they failed to do and it would have been to late for my current corrupt servicer to reinscibe my mortgage since it was transfered to them way after the 10 year time limit.

Lets have your opinion on this one. [smile]

Thanks. MSF Fan

Is anyone familiar with the debt elimination scam involving so called re-inscription laws? Also, is this scam perpetrated anywhere besides Louisiana? Can anyone advise as to whether this is profitable for mortgage fraud experts? Also, can anyone give some examples of the paperwork that could be modified and resold? This isn't being used in my area. It could be an additional option for our customers. Thanks in advance!
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texas

 

Louisiana Revised Statutes 9:5530 - Cancellation; reinscription; fee


A. When any mortgage of a ship under this Chapter shall have been fully paid or satisfied the mortgage may be cancelled in any manner provided by law for the cancellation of mortgages on immovable property. The effect of a mortgage of a ship shall cease if the inscription thereof has not been renewed in the same manner in which it was first made by the recorder of mortgages within one year after the date of the last installment provided for in such mortgage or within five years after the date of execution of the act of mortgage, whichever is later. Reinscription shall renew the effect of the mortgage for the amount unpaid for a period of two years from the date of the reinscription and further renewals may be made thereafter from time to time, the effect of each new reinscription being for two years from its date. The recorder of mortgages shall each receive one dollar for each cancellation and two dollars for each reinscription of a mortgage under this Chapter.

B. Recorders of mortgages may destroy the records of mortgages of ships in their respective offices two years after the date of the last installment provided for in such mortgage or six years after the date of execution of the act of mortgage, whichever is later, unless they have been reinscribed in the form and manner herein provided.

Added by Acts 1975, No. 368, §1.

bold underlined emphasis added

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Troy
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Louisiana Revised Statutes 9:5530 - Cancellation; reinscription; fee A. When any mortgage of a ship under this Chapter shall have been fully paid or satisfied the mortgage may be cancelled in any manner provided by law for the cancellation of mortgages on immovable property. The effect of a mortgage of a ship shall cease if the inscription thereof has not been renewed in the same manner in which it was first made by the recorder of mortgages within one year after the date of the last installment provided for in such mortgage or within five years after the date of execution of the act of mortgage, whichever is later. Reinscription shall renew the effect of the mortgage for the amount unpaid for a period of two years from the date of the reinscription and further renewals may be made thereafter from time to time, the effect of each new reinscription being for two years from its date. The recorder of mortgages shall each receive one dollar for each cancellation and two dollars for each reinscription of a mortgage under this Chapter. B. Recorders of mortgages may destroy the records of mortgages of ships in their respective offices two years after the date of the last installment provided for in such mortgage or six years after the date of execution of the act of mortgage, whichever is later, unless they have been reinscribed in the form and manner herein provided. Added by Acts 1975, No. 368, §1. bold underlined emphasis added
Texas, this is not the only provision in the Louisiana Civil Law regarding reinscription. This is not to say that you are mistaken in your understanding that this is merely another scam. You are right about that! The reinscription debt elimination scam has been around in Louisiana for at least several decades. It is based upon borrower confusion about the meaning and legal significance of reinscription. This confusion is closely related to borrower confusion about the legal significance of failing to record a mortgage lien. Mr. Roper posted several times explaining whether a mortgage was valid was usually established under a state's statute of frauds. Glenn Augenstein recently posted elsewhere about this, as well. Whether a mortgage is valid as between the maker and grantee is usually a very separate question from issues of lien priority. Lien priority and validity of competing deeds is usually determined by separately enacted recording statutes, including notice, race and race notice varieties. In Louisiana, there is another additional dynamic introduced by the reinscription laws,of which there are several. Generally, reinscription, like recording statutes, pertains to lien priority, but this is not universally the case. For example, in respect of a tax lien, under Louisiana's unique statutes, and (I believe) workmans'/mechanics' liens, a lien can be absolutely extinguished by failure to reinscribe. The distinction seems to be that when the lien is created by statute (rather than contract) it can be absolutely extinguished by the reinscription statute, but when the lien is created by contract, the lien survives a failure to reinscribe, but a reinscription failure would tend to cause the contract lienholder to lose priority. Basically, as between the parties to or in privity to the contract, reinscription doesn't matter. As to third parties, reinscription controls. Confusion about the reinscription laws makes this area rife with possibilities for the scammers and swindlers. The confusion is quite ancient. Take a look at this ancient U.S. Supreme Court case from 1869: [i]Patterson v. De la Ronde, 75 U.S. 292 (U.S. 1869)[/b] http://scholar.google.com/scholar_case?case=8910405940434230268 The U.S. Supreme Court revisited the Louisiana reinscription issue a couple of more times later in the 1800s, including giving this clarifying language:
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"That court has decided that, under the positive law of Louisiana, as contained in the code and statutes, nothing supplies [289] the place of registry, or dispenses with it, so far as those are concerned who are not parties to the mortgage, and that when ten years have elapsed from the date of inscription without reinscription, the mortgage is without effect as to all persons whomsoever who are not parties to the mortgage. Adams & Co. v. Daunis, 29 La. Ann. 315, and cases there cited." [i]Bondurant v. Watson, 103 U.S. 281 (U.S. 1881)[/b] http://scholar.google.com/scholar_case?case=7104028252860718970
Someone posted earlier about reinscription scams being run in Louisiana in the early 1990s in the pre-Internet era. That post seems to have been deleted by the site administrator, because it contained junk information. The Louisiana Supreme Court has addressed reinscription upon multiple occasions. The case of Flowers, Inc. v. Rausch in 1978 is one case that addressed the legal effects of failure to reinscribe on tax liens: [i]Flowers, Inc. v. Rausch, 364 So. 2d 928 (La. 1978)[/b] http://scholar.google.com/scholar_case?case=12103288781594620157 One of the earlier posts (since deleted) said that this was a terrific scam and it IS, since borrowers can be easily deceived into thinking that failure to reinscribe might lead to extinguishment of the debt (it doesn't) and therefore this myth feeds various swindles in which the borrower is promised that the lien can be made to go away by paying the scam artist money for legal pleadings, title examinations, reports, affidavits, and other useless scam products. Several Louisiana politicians were jailed in the 1980s for taking payoffs from some of the promoters of the reinscription scams. But that isn't saying much, because Louisiana politicians have been jailed for just about everything and Rep. William Jefferson, was found to have $90,000 in cash in his freezer: http://en.wikipedia.org/wiki/William_J._Jefferson_corruption_case That kind of thing is just business as usual in Louisiana!
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Texas Special
You have been given some very good information..Something that I haven't heard anyone mention is anything about the Bankruptcy. You don't say if you filed chp 13 or chp 7. If a chp 7 was filed and you retained your home thereafter your debt could of been discharged. What this means is that you keep your home the debt is discharged and when you go to sell you own the home free and clear. Unless you did a reaffirmation agreement. 

People can say what they want about the assignment but usually they are done. If you filed a bk I would also look for the proof of claims filed with the courts to make sure there are proper endorsements on the note. I find it interesting that you say they filed it as a unsecured claim.  I've heard of people putting it down as an unsecured debt to make them show proof but never this way.  I am kinda wondering how it couldn't be a tila and respa claim. Real estate settlement procedures means there are certain procedures to follow upon closing a loan. If it wasn't done then how couldn't there be a respa claim. As a Holder in due course they do have to take on some responsibility if there are inadequacies. 
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Mike H
       With regard to Bankruptcy, an important issue is whether you file prejudgment or post judgment. When a judgment is entered,
the plaintiff must surrender the Note & Mortgage to the Court in exchange for an unsecured judgment. Unless a certified copy of the
judgment is recorded, it remains unsecured.
       In most States this has very little meaning but in those States with a high Homestead Exemption such as Florida and Texas, it
is possible to get the unsecured judgment discharged and the property is "abandoned" by the trustee because  the Homestead
exemption is unlimited and nullifies the unsecured judgment.(In other words  the property is returned to the debtor free and clear)
       When this happens, the only recourse for the plaintiff is to file a Motion to vacate the judgment in State Court, and have the
Note & Mortgage returned to the plaintiff so they can refile the whole foreclosure case. Of course the defendant would have used
up their ch 7, but at least the defendant will get to fight the battle a second time.
       Many Judges and attorneys believe the mortgage lien merges with the judgment, however this could not be true because if
it were true, the clerk would not be able to sell the property free and clear on the court house steps. For example if the property
is only worth 100K but the judgment is for 200k, if the uncertified judgment were secured, the clerk could not give a title free and
clear to a high bidder who say, bid 75 K for the property. There would still be an encumbrance of 125k attached to the property.
       The purpose of a foreclosure action is to remove all liens from the property so it can be sold "free & clear" to the next buyer.
If the judgment were 50k on a property worth 200k, the judgment creditor would have the option of recording a certified copy of
the judgment in order to put a "floor" under the bidding and quarantee that it sold for at least as much as the judgment.

       So the idea is to coordinate BK with the Homestead exemption in your State. Most attorneys do not do this so you must talk
to them about it.
       Comments and critiques welcome. Let's be civil about it. I know this opinion raises passions. But I have been there and done that!
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texas
All that made no sense whatsoever.
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Mike H
With all due respect, that's because you have not thought about it.
    The issue is whether or not a lien merges with a judgment or if the plaintiff must record a certified copy of the judgment in order to
'"reencumber" the property. If the judgment is unsecured, it can be discharged in bankrupty. If secured, it can not be discharged
without paying it in full.( Fl. Stat. 55.10)
     Every State has different Homestead Exemptions, for example in NY I believe it is 50K whereas in Fl. it is unlimited. If the judgment
is "unsecured" this would impact whether or not the debtor got some cash back or got their home returned to them "free and clear".

     It's alot like the issue of evolution versus creationism. Since most people just accept what they've been told over and over again,
they seldom analyse it for themselves. Most people believe the Earth is billions of year old, so evolution seems plausible, ie given enough time non living matter can turn into living organisms. If you prove to them scientifically that the Earth is only about 6000 years old, the whole theory of Evolution collapses and the only thing left is Special Creation, ie a Creator exists.

     It's the same principal here. Most people just "assume" that the lien merges with the judgment. Therefore, Ch 7 bankruptcy does
not appear to be an option to save the property.
     However once they realize that the lien does not merge with the judgment, than the possibility of saving the property by filing
Ch 7 or Ch 13 post judgment becomes a realistic hope.
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texas
Not much to think about, agreed to attach and perfect a judgement to real property requires the judgment to be filed of record in property records. However, where the judgment was not obtained per statutory law, is such judgment void or voidable which takes the problem back to the source. How does the judgment that fails to comply with statutory law become secured or unsecured?
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Mike H
       Whether or not the judgment was "lawfully obtained" or not, does not effect whether it is
secured or unsecured.
       The law is quite clear that all judgments are unsecured unless a certified copy of it is recorded
in the Official Records of the County where the property is located. (USC Title 28: 1962 & 1963) &      (Fl. Stat 55.10) (Also, see Trawick on judgments)
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Phred
My time in BK was very limited because I needed to learn the state court rules and statutes instead of BK law. But I thought there was an adversarial tactic available to the borrower that started with listing the Subject Loan as 'unsecured' and subject to discharge after the lender is notified. The lender then has to challenge the 'unsecured' status by proving beneficiary / note holder status. The BK judges have caught on to the banksters' scheme and now demand presentation of the original promissory note, and a proven chain of beneficiary interest. This may include business records of the sale and purchase of the Subject Loan. This is UCC territory, which state courts like CA don't want to tread.

So it seems to me if the bankster isn't successful in proving a secured interest, the Subject Loan is 'satisfied' by the discharge of the BK court, and any security instrument guaranteeing its payment is void.

Generally servicers don't get invited to the BK action, and they may think they still have an active account for the borrower's loan with the beneficiary (who likely failed to notify the servicer of the extinguished loan). In that case the borrower should expect to send a copy of the BK discharge order to the servicer with an attached cease and desist demand letter. Any further communication by the servicer after that is a violation of the UCL and FDCRA, and can result in a tidy sum from awards of fines for the borrower.

IANAL - I am not a lawyer, so the above is all legal hooie and should not be considered legal advice you should act upon.
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