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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tmc
If there was a modification that "amended and supplemented" the original Note; must that modification be included in the Note and endorsed as well?  I received a copy of the original Note that was endorsed in blank but the modification was nowhere to be found.  Is there servicer in trouble if they can't even find a copy of the modification to forge?
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topguncrdtadvsr
TMC,

I actually sat here and typed up two different responses and deleted them both before posting this. I've never known them to create a modification supplement within a new note. When one applies and is approved usually they use a standard doc issued by FHA. Part of the approval process is making sure your credit qualifies you for that loan regardless of what they tell us. This means creditors must be current so what could they be modifying when their originating your mortgage?

After origination they record your NON-ENDORSED note within county records. After this the only way you see your note usually is within a court process. So how do you know its not endorsed by anyone or done improperly? After origination of a note if there is a modification offered the servicer does keep the records. However the initial origination recording is all they need to do. There is no requirement that they record a modification anywhere.


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tmc
1. The loan originated in 2007.
2. I entered into a modification to the loan in 2008 which "amended and supplemented" the Note.
3. In 2009 I filed chptr 7 and was discharged.
4. In 2011, for an unknown reason, the servicer filed a motion for relief of stay in which they included the original note which had a blank endorsement.  They did not include the modification agreement in the motion.
5. Further more, there was an interest rate change date, per the modification agreement.  The servicer seems ignorant of the interest change as it was not reflected in the amount owed in the Notice of Default nor in the payoff figures they provided me with which overstated the amount owed or amount to cure by about $5,0000.
6.  My home was sold at trustee sale 6 weeks ago.

I know they can get a copy of the Note from the original title company or the county recorder.  But they can not get a copy of the modification because it didn't go through a title company and it was never recorded.  I would think they don't have the modification or they would have been aware of the terms and would have included it in the motion for relief.  So, my burning question is; are they a holder and able to enforce the note when the note is incomplete because it lacks the modification?  Are they required to posses and endorsed copy of the modification as well as the Note?


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bwssr
What do you do if the bank introduces the original note as evidence in a foreclosure but does not introduce the loan modification that happened later on ? The foreclosure was filed 2 years after the loan modification and is not mentioned in the complaint.
They get a bailout and we get the boot.
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topguncrdtadvsr
Tmc- Interesting--So the mod wasn't given when you originated your mortgage. It was a year later after the original instrument was created. I don't know that they have to include your mod agreement with the court. As far as I know only the original is what get's filed. Unless you have an atty to put to use the tools to help the homeowner.

As far as the chp 7 goes to file you had to be current on your 1st. So the mod allowed you to be current in order to do the Chp7 otherwise they would of required you to do a chp 13, and put your arrears into a trustee payment.

When you filed chp 7 did you reaffirm the debt? After filing have you missed any payments to make them file the Lift of Stay? One would think if your bk had already been discharged and closed that they would not be able to come back in and ask for a lift of stay. If there were no issues why come back into the bk court to do a lift of stay? Especially if your in a non-judicial state. They could just foreclose.   Nothing they do however makes sense.



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topguncrdtadvsr
A modification is separate from an original instrument. I know of no requirement that they have to record a modification anywhere. However, if your current on your modification usually they don't file foreclosure. Then again I shouldn't say that either cause I know homes are stolen on more than one level.

I wish I had a specific case in mind to reference for you or TMC that references the complaints I've seen attorneys use that help  enforce the different benefits that are suppose to be available thru like harp tarp or something to that effect. I know I've seen them but can't remember the names grr! Maybe someone else here will know of a complaint used that states the issue with the mod not being followed and how they tackled it. I'm sure there's a few but when you get TMI your brain doesn't remember everything specifically with so many different state/federal laws. I'm not a computer, close but no cigar.


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Angelo
Topgun said
First, "After origination they record your NON-ENDORSED note within county records...."
 
This not always true, I have never seen a note filed in the country records.  The mortgage must be filed, but not the note. 
 
Second, a Modification is just that, it modifiys the original note.  The original note is always the main issue, as it is the only evidence of a debt instrument,  The modification isn't.
 As for the proof of claim, they have to file the modification agreement because that is the only evidence that they have that the rate and terms of the original note have changed.  If they dont, you should object to the proof of claim and make them prove up that claim.
 
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bwssr
Does owner ship of the note usually change hands after a loan mod?
They get a bailout and we get the boot.
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topguncrdtadvsr
The note after being originated can be sold multiple times. It most definitely can change after a modification. That's why the assignment matters. Broken chains of title are hard not to find in this day and age.

In my case they clearly showed they sold the debt prior to foreclosure in the so called servicers name. This was done on my credit bureau. But hey that's ok we live in America the new place where government corruption reigns!

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t

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If there was a modification that "amended and supplemented" the original Note; must that modification be included in the Note and endorsed as well? I received a copy of the original Note that was endorsed in blank but the modification was nowhere to be found. Is there servicer in trouble if they can't even find a copy of the modification to forge?
 

To the extent that a modification agreement was actually agreed upon and executed by both parties, then certainly that modification agreement would usually modify and supersede the original note and/or mortgage.

 

On the other hand, Mr. Roper has pointed out previously in several posts that very often servicers use modification as a scam to obtain various concessions and admissions by the borrower, but the lender never actually executes the modification agreement at all.

 

There have been a number of cases where a modification agreement executed only by the borrower has been admitted into evidence.  Courts have often and uniformly found that a modification agreement executed only by the borrower, but not by the Lender, is not an agreement at all, especially when the agreement expressly calls for execution by both parties.

 

It is common for the servicer to present a modification agreement to the borrower for the borrower's signature.  The agreement is then returned to the Lender (servicer) and the servicer simply puts it in the file to use against the borrower, if helpful or convenient, but the servicer can and will repudiate the agreement if that serves the Lender's interest.

 

So at the very outset, in thinking about and discussing a modification agreement, the threshold question is whether the borrower has proof of a legally binding agreement at all.

 

It should be noted that the modification agreements are almost always oppressive and "in house" modification agreements usually include language that provides for borrower confession of various amounts due (including amounts for which there is no legal basis whatsoever), as well as various waivers and confessions as to various possible defenses, including fraud.

 

The primary purpose of the modification agreement is usually not to keep the borrower in the property, but precisely the opposite.  The goal is usually to obtain borrower concessions that will speed and assure foreclosure with essentially no opposition. 

 

For this reason, if the servicer has misplaced or forgotten about the modification agreement and fails to produce it in litigation, usually the borrower should count his or her blessings.  The modification agreement will rarely prove to be helpful to a borrower.  More often, it will eviscerate the borrowers defenses.  For this reason, extreme care should be taken before ever mentioning such a document if the creditor/plaintiff hasn't plead the agreement.

 

See Mr. Roper's prior posts on this subject. 

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Angelo
t said
"To the extent that a modification agreement was actually agreed upon and executed by both parties, then certainly that modification agreement would usually modify and supersede the original note and/or mortgage."
 
I know in my modification there was a strict provision that states: nothing in this agreement shall be understood or construed to be a satisfaction or release in whole or in part of the Note and security instument.  Except as otherwise specifically provided in this argreement, the note and security insrument will remain unchanged, and the borrower and lender will be bound by, and comply with, all terms and provisions thereof, as amended by this agreement.
 
It seems to me that they usually dont list all the provision of the original note in the modification, so they would need to keep the original note too, with only strict provisions of the modification to supersede the original. 
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tmc
Yes, my modification stated "borrower acknowledges that XYZ is the owner of the Note..." among other things that probably wouldn't help my cause.

I don't know if the modifcation was ever signed by the lender. BUT, the terms of the modfication were in place as the payment changed to reflect the modified payment.  New modified payments were accepted and statements reflect the modified payment so I think there is proof of a modification AGREEMENT.

The failure of the NEW lender to recognize the modification has created the following issues:
Principal sum owed and interest rate on the Notice of Default does not match the Note, both of which the lender submitted to the court.
The amount to cure the default is overstated because the lower interest rate on the modification was not used to calculate a cure or payoff figure.

So back to the question; we have a binding agreement on the modification.  Is the lender a holder entitled to enforce without this modification?

As Plaintiff, can I just sit back and point out the inconsistencies between the Note the lender produced and let them try to explain it?

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Stan

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So back to the question; we have a binding agreement on the modification.   Is the lender a holder entitled to enforce without this modification?

 

You state that "we have a binding agreement on the modification", but earlier said "I don't know if the modifcation was ever signed by the lender. BUT, the terms of the modfication were in place as the payment changed to reflect the modified payment."  It seems to me that you present a possibly faulty legal conclusion.

 

Does the modification agreement call for the signature of both parties to give the agreement effect?  This might take the form of express language, but also might simply be implied by the appearance of a place on the agreement for the Lender to sign.

 

You begin with the conclusion which might or might not be correct.  In most states, as t points out, failure of one party to execute the agreement would be rather strong and conclusive evidence that a contract never came into being.

 

The assertion that acceptance of payments consistent with the modification agreement proves acceptance of the agreement is pretty weak at best, since a Lender can always elect to accept partial payments and can unilaterally choose forbearance without entering into a modification agreement at all. 

 

Paragraph 12 of your deed of trust probably includes this language:

 

12.  Borrower Not Released; Forbearance By Lender Not a Waiver.  Extension of the time for payment or modification of amortization of the sums secured by this Security Instrument granted by Lender to Borrower or any Successor in Interest of Borrower shall not operate to release the liability of Borrower or any Successors in Interest of Borrower.  Lender shall not be required to commence proceedings against any Successor in Interest of Borrower or to refuse to extend time for payment or otherwise modify amortization of the sums secured by this Security Instrument by reason of any demand made by the original Borrower or any Successors in Interest of Borrower.  Any forbearance by Lender in exercising any right or remedy including, without limitation, Lender’s acceptance of payments from third persons, entities or Successors in Interest of Borrower or in amounts less than the amount then due, shall not be a waiver of or preclude the exercise of any right or remedy.

 

As t points out, most often the mortgage investor or servicer will seek to assert the terms of the modification, because the oppressive language is more favorable to the Lender.  It is unclear what you hope to accomplish by asserting that the modifcation is valid and binding as this may make your case worse rather than better.

 

To any extent that you think that the argument that a foreclosure was wrongful because the Lender failed to follow the written modification agreement, if you do not even have a signed copy of the agreement, you seem to be describing exactly the situation t talked about.  Moreover, the question as to wrongful foreclosure will turn on whether there was a default, not the amount of default.  If you go into court and the creditor says you owed $10,000 at default and you say, "No, I did't owe a dime more than $8,000 when I defaulted", the judge is going to throw you out on your ear.

 

The only successful argument is probably going to be that you were never in default at all.  Good luck!

 

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As Plaintiff, can I just sit back and point out the inconsistencies between the Note the lender produced and let them try to explain it?
 

 

As plaintiff in any proceeding, you cannot just "sit back" and hope for anything.  You will bear the burden of proof as to every essential element of your asserted cause of action.  It is the defendant which can sit back and simply assail your arguments and your proof.

 

This is why it is so much harder to win as plainiff than to prevail as a defendant.  This is also why it is always easier to defend in a non-judicial foreclosure state in a Bankruptcy setting rather than as plaintiff in a state or Federal court action for wrongful foreclosure.

 

*

 

Before I began to argue that there was a binding modification agreement, I would read the modifcation agreement about twenty times, look up all of the statutes and cases, show the modification agreement to a lawyer and ask yourself what you are trying to PROVE by the modifcation agreement.  Most borrowers would usually be better off NOT putting the modification agreement into evidence, because much of the language is likely to eviscerate your case.

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tmc
Throw me out on my ear??

The Supreme Court in my state has ruled that to meet the constitutional requirments of due process requires STRICT compliance with notice provisions of a non-judicial foreclosure.  One of the requirements of  notice is the sum amount owed.  So in your example, I think it's a pretty good idea to tell the Court that I owed 8,000, I had 8,500 but the Notice said I owed $10,000.  I relied on the information in the Notice and was not able to cure the default.

Is that really a laughable argument?

Also, whether or not the modification is binding.  They made an offer,  I accepted it.  The statements they mailed reflect the modified payment amount.  The notice of default represents the modified principal amount.  Their actions say they signed the modification.
However, the modification has a change date in which the rate was lowered substantially which is not reflected in the sum amount due on the notice of sale, nor in the amount to cure which was provided by the trustee. 

So, yes; I do like my position.  If I'm missing something, please let me know because I just don't see it.

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Realgreeneyes1

Anyone looking for modification should read this, VERy IMporTant....It also has alot of information regarding MERS & how the game is played this will give you TEETH in your fight!!!!

http://www.scribd.com/fullscreen/33752461

here is another one WE the home owners need to put MERS out of business period.

http://www.msfraud.org/law/lounge/huml-v-fannie-mae-mers-removal-to-federal-4-12.pdf

Ecco Debnam
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t

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Throw me out on my ear??

The Supreme Court in my state has ruled that to meet the constitutional requirments of due process requires STRICT compliance with notice provisions of a non-judicial foreclosure. One of the requirements of notice is the sum amount owed. So in your example, I think it's a pretty good idea to tell the Court that I owed 8,000, I had 8,500 but the Notice said I owed $10,000. I relied on the information in the Notice and was not able to cure the default.

Is that really a laughable argument?

Also, whether or not the modification is binding. They made an offer, I accepted it. The statements they mailed reflect the modified payment amount. The notice of default represents the modified principal amount. Their actions say they signed the modification.
However, the modification has a change date in which the rate was lowered substantially which is not reflected in the sum amount due on the notice of sale, nor in the amount to cure which was provided by the trustee.

So, yes; I do like my position. If I'm missing something, please let me know because I just don't see it.
 

 

I think that Stan is just trying to help.  You are far better off to have had others critique your arguments enabling you to better anticipate and refine your own case than learning of the defects for the first time from your adversaries under some duress.

 

It is an interesting argument that the notice of default is incorrect as to amount, but whether this would void a private sale is quite unclear to me and I am confident that the outcome would vary by place.

 

You are absolutely correct that most states require a very strict adherence to both the contractual provisions for private sale, as well as the state's laws.  Minor defects in procedure can often void a sale.

 

I am far from certain that a deviation in the amount shown as owing is one of these.

 

Some courts might find that a borrower who notices a defect in the notice of default might have some duty to identify the defect in a timely way. Other courts might look to whether the defect is one that prejudices the borrower.

 

For example, if a borrower came forward with the real amount owing and necessary to cure and tendered this amount to the Lender, I would think that the borrower would have an exceptionally strong argument that the borrower was prejudiced by the defect in the notice of default.

 

By contrast, if the borrower makes no effort to identify and seek correction of the error and makes no tender of the correct amount, this might be found to be a defect that is waived by the borrower.  I am far from confident that an error in the amount shown either voids the private sale or even makes the sale voidable.

 

In the end, I think this will depend upon the statutes of a state and the court decisions interpreting those statutes.  I would NOT want to bet money that tmc's interpretation will be upheld by the courts.

 

Moreover, tmc continues to insist that he has a binding modification agreement in respect of the servicer treating the modification agreement as valid.  I am also far from confident that courts will uniformly agree.  I think that the outcome depends upon the precise wording of the agreement and the laws of the particular state.

 

tmc also seems to fail to appreciate that sometimes a borrower's interests can be better advanced or preserved by ignoring or looking past certain facts.

 

A lawsuit is not an adventure in leading the court to the truth.  Rather, it is an exercise in presenting some facts which make out a litigant's case in a manor favorable for the litigant.  tmc seems to be way to overconfident as to his interpretation and way too certain as to the appropriate strategy.

 

Often, the best cases can be constructed by thinking outside of the box and also preserving options rather than boxing oneself in to a particular strategy.

 

tmc might discover that if he refrains from pleading the modification that the creditor defendant will bring it in signed, thereby eliminating his proof problem and questions as to the efficacy of an estoppel argument.  By contrast, if tmc leads with the modification, then the creditor is far more likely to repudiate the agreement.

 

There seems to be a rather acute failure to appreciate good litigation strategy.  Like so many litigants, tmc seems to be in a hurry to tell his story.  He might want to take a lesson from the vague pleadings of the banks which are habitually short on facts,l but which tend to preserve the bank's options to alter their arguments and even alter the evidence!

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John Lewis

In my most humble opinion I would urge all ProSe litigants to make note of, and, print out t's advice below, to read it each and every time that one goes to formulate either strategy or to structure pleadings ~

 

"A lawsuit is not an adventure in leading the court to the truth. Rather, it is an exercise in presenting some facts which make out a litigant's case in a manor favorable for the litigant. tmc seems to be way to overconfident as to his interpretation and way too certain as to the appropriate strategy.

Often, the best cases can be constructed by thinking outside of the box and also preserving options rather than boxing oneself in to a particular strategy.

tmc might discover that if he refrains from pleading the modification that the creditor defendant will bring it in signed, thereby eliminating his proof problem and questions as to the efficacy of an estoppel argument. By contrast, if tmc leads with the modification, then the creditor is far more likely to repudiate the agreement.

There seems to be a rather acute failure to appreciate good litigation strategy. Like so many litigants, tmc seems to be in a hurry to tell his story. He might want to take a lesson from the vague pleadings of the banks which are habitually short on facts,l but which tend to preserve the bank's options to alter their arguments and even alter the evidence!"

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tmc
I do appreciate the help the time everyone takes to help me.  I'm really not that confident about my situation; I'm just trying to make an argument and hear what the faults are. 

My situation is complicated to say the least.  We're going on 4 years since acceleration; my only goal is to have the trustee sale voided.  I did raise the issue about the amount owed being too high before the sale.  I did file a claim and lis pendens before the sale.






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tmc
Ok, I also paid $10.00 for the modification.  And yes, the lender cashed the check.

Also, the is text from the modification; "Borrower acknowledges that Lender is the holder and owner of the Note and understand that Lender may transfer the Note, as amended by this Agreement, and that anyone...."

Let's assume that it is a binding modification....so where could that get me?  Does the Lender need to produce the Modification with the original Note in order to foreclose?
Is the over statement of money owed a glitch, or a substantial deprivation of my due process rights and enjoy my property.  (the amount of the overstatement, based on the modification is about $20,000)

If it can't get me anywhere, I won't push for the modification because it does have a waiver that doesn't help me. 

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marie
It's an agreement and not a "contract" that's one way of looking at it.
mgd
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Matt

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It's an agreement and not a "contract" that's one way of looking at it.

This post makes no sense whatsoever.  An agreement with consideration usually is a contract.

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MSF Moderator
tmc:

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We're going on 4 years since acceleration; 


Check your statute of limitations.  In Ohio, the party trying to foreclose has 6 years in which to do so.  In Texas, it is 4-years.

From my brief:

The statute of limitations on an installment note is four years from acceleration.  Tex. Civ. Prac. & Rem. Code § 16.04.  As a result, the statute of limitations on the Note has expired, and as a matter of law, the homeowner is entitled to a declaration that his obligation under the Note is discharged by limitations.  As a result, the pretender lender's current attempt to foreclose on the Property is unlawful and should therefore be enjoined.


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t

Discussion about state statutes of limitation appear in a number of various threads.  I am seeking to unify this discussion within this dedicated thread:

 

Statute of Limitations on a Note

http://ssgoldstar.websitetoolbox.com/post/Statute-of-Limitations-on-a-Note-5827287

 

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t

The MSFraud Administrator is correct in the identification of limitations in Texas as being four years, but is in error in the identification of the statute of limitations in Texas:

 

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From my brief:

The statute of limitations on an installment note is four years from acceleration. Tex. Civ. Prac. & Rem. Code § 16.04. As a result, the statute of limitations on the Note has expired, and as a matter of law, the homeowner is entitled to a declaration that his obligation under the Note is discharged by limitations. As a result, the pretender lender's current attempt to foreclose on the Property is unlawful and should therefore be enjoined.

 

There are two provisions in Texas law, one controlling limitations on a note and another separate provision covering limitations in respect of a deed of trust.

 

Negotiable instrument (notes) are generally covered under the provisions of the Texas implementation of UCC Section 3-188, which appears as Tex. Bus. & Comm. Code §3.118, providing for a six year limitation:

 

http://www.statutes.legis.state.tx.us/Docs/BC/htm/BC.3.htm#3.118

 

However, as shown within Subsection (h), the six year limitations does not apply when there is real property lien.

 

The correct section which sets forth the limitations period for Texas deeds of trust is Tex. Civ. Prac. & Rem. Code §16.035:

 

http://www.statutes.legis.state.tx.us/Docs/CP/htm/CP.16.htm#16.035

 

Tex. Civ. Prac. & Rem. Code §16.004 would apply to a suit on debt (other than a negotiable instrument), fraud, and specific performance of a contract for the sale of real property (e.g. a real estate sales agreement):

 

http://www.statutes.legis.state.tx.us/Docs/CP/htm/CP.16.htm#16.004

 

The MSF Administrator cites the correct period, but cites the wrong section It is generally best to quote the correct Section and cases pertaining to that section in setting up your limitations defense. 

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Ok how's this one:

Lender Countrywide originates in 2007. A modification is done 18 months later and an "Amended and Restated Promissory Note" is issued. Mod agreement states the information as above in regards to the changing of 2 paragraphs in the deed of trust regarding original amount of loan, payment address, start date of loan, and the final payment date extended out 18 months. So, in theory a new loan. Agreement made and kept, past due amount (3 payments told not to make during mode period) were rolled onto the back of loan.

Between the transfer to BoA after they allegedly purchased CW, they started to send payments back and 7 months later, received a NOITA and NOD even through the default was created by refused payments.

Looking at the FC hearing in Feb, response to QWR shows a new Holder, endorsements on the original (not amended and restated) with no mention of Mod and new note. Also, payment history is all screwed up showing investor payments, reversals, payments recieved from me being returned...

It looks like the image of default was created by BoA with the intent to FC after aquirering.

The mod agreement was not filed but I have a copy of the amended note and notarized mod agreement. Any opinions?
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Boris
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nder Countrywide originates in 2007. A modification is done 18 months later and an "Amended and Restated Promissory Note" is issued. Mod agreement states the information as above in regards to the changing of 2 paragraphs in the deed of trust regarding original amount of loan, payment address, start date of loan, and the final payment date extended out 18 months. So, in theory a new loan. Agreement made and kept, past due amount (3 payments told not to make during mode period) were rolled onto the back of loan.


I will bet anyone a cup of coffee that this visitor neglected to obtain a signed copy of the purported modification agreement and instead of having a valid binding contract has merely an offer to make a contract which is enforceable against the borrower but not enforceable against the Lender.  Mr. Roper has posted about this several times.  Oops!
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