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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Mortgages vs Judgments, What is the difference?
    Many people seem to think that when a foreclosure action results in a
judgment against the homeowner, the mortgage lien follows the judgment.
This is not true for the obvious reason that if it were true, the sale would
not give clear title to the buyer at the auction.
    For example, let's say the Note and mortgage are for $200,000 and the
judgment comes in at $225,000. The property is only worth say $100,000.
A bidder goes to the auction and pays $75,000. Does this mean there is still a $150,000 lien against the property? (225-75=150) Of course not! But why not?
    The fact is that the Note and Mortgage are extinguished by the judgment
and no longer exist, they are surrendered to the Court. The judgment entered is unsecured and could be applied to any property the judgment
debtor owns, not only the property which was encumbered by the Note
and Mortgage before the judgment was entered. THE JUDGMENT BECOMES UNSECURED. In most cases, this has no significance, since the judgment
holder can levy against any property the debtor owns.
     This fact becomes significant if the debtor has the Homestead Exemption
and files Chapter 7 bankruptcy. After the judgment is entered, the property
becomes unencumbered and the judgment becomes unsecured. The HX exemption will protect some or all of the equity of the debtor. The amount
and extent of the protection will vary by State, but this is something to consider if one is thinking about bankruptcy. Beware of lawyers who tell
you the lien follows the judgment. Their ignorance could cost you the property or the cash you are entitled to. That was the original purpose of
the HX exemption, ie for deflationary times like these so that the homeowner
would would not lose all their equity and at least walk away with something.
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