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 All!

Does anyone know if there is some sort of protocol if a Notice of Default is filed naming one beneficiary but then months later there is a new beneficiary due to mergers or buyouts?

Does the new company have to rescind and refile the Notice of Default? or attach something besides an Assignment of Deed?


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If a mortgage company ever stops a foreclosure as far as I know when they wish to move forward they have to restart the whole process again. Then they should follow the law according to your state statutes I believe...

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Hey BF,

Don't know if this might be of some help.  Others on this site brought this to my attention.  Look it up in your state laws and check with others that may have used this.

. Real property — Documents to be recorded — Trust property
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William A. Roper, Jr.

Your question presents both a question of fact and a question of law. 

The fact question is going to be determined by the specific provisions of the alleged promissory note and/or alleged mortgage, deed of trust or other mortgage security instrument together with the facts of ownership (and right to enforce) relating to such instruments and the language of the notice of default itself.  There is no single monolithic correct answer given the bare facts you sketch out.

These facts will then ultimately be interpretted and applied with reference to the law of your state.

START by carefully reading the covenants of the alleged promissory note and/or alleged mortgage, deed of trust and/or other mortgage security instrument.  These will give the basic contractual provisions applying to notices generally and a notice of default and/or notice of acceleration required.

But then apply a little common sense.  Suppose that I went to the courthouse and found a copy of your alleged mortgage, deed of trust and/or other mortgage security instrument amongst the recorded deed and mortgage records.  Further suppose that I then prepared and mailed to YOU a notice of default which contained all of the requisites for a valid notice, identifying with particularity the subject property, your name, the original mortgage balance, etc.  But consider the possibility that I have no interest in your mortgage indebtedness whatsoever.

It is pretty easy to see in this stark example that my notice to you in no way alters your rights nor does it effect any acceleration at all.  And to the extent that I did this independently and without the knowledge or consent of the actual mortgage investor, it would be unfair to the investor to charge the investor with my ill behavior.

Now if you took the same set of facts EXCEPT that I was an employee or agent of the mortgage investor (but acting without authorization) things begin to get a little more murky.  And if I was the original named Lender on the alleged promissory note and/or alleged mortgage, deed of trust and/or other mortgage security instrument, which alleged note had been indorsed and delivered to another mortgage investor without recording the mortgage (giving rise to the perception that I am the owner with a right to enforce), things may be murkier still.

When you get into the law of agency, we will find generally that an agent with the actual or apparent authority to act on behalf of a principal can and may bind the principal.  Even an agent without actual or apparent authority can bind the principal where the principal is aware of and ratifies the acts.

So when a purported mortgage servicer sends a notice of default, you get into a variety of rather vexing questions.  Who really owns the mortgage (who is the principal)?  Who is the holder of the mortgage (might be principal or an agent given the mortgage with the right to enforce)?  Is the purported agent acting with actual authority under a power of attorney (FNMA/FHLMC Sellers and Servicers Agreement, mortgage trust Pooling and Servicing Agreement)?  And even if the servicer is acting without authority, does the servicer have the apparent authority (were the HUD Hello/Goodbye letters sent)?

A properly executed notice of default and/or notice of acceleration is probably going to be binding if the person giving the notice had the actual authority to send the notice; had the apparent authority to send the notice and/or the notice was ratified by the principal.

Bear in mind that such notices, and particularly a notice of acceleration, serve as a double edged sword.  While acceleration is probably a condition precedent that must be satisfied in order to foreclose, it is also likely to trigger the running of limitations on suit in most states.  That is, there is a statute of limitations in most places precluding suits on older matters.  Also, in most places, the limitations period for installment indebtedness doesn't tend to start to run until the final payment is due (after, for example the thirty year term of a mortgage).

But with acceleration, the entire amount is then due immediately.  SAVE the notice of acceleration.  It MIGHT just come in handy!  IF the plaintiff brings a suit inthe name of the wrong entity OR forges documents in evidence or otherwise comes into court without standing, you might very well find that you can fight this plaintiff for several years and then suddenly discover that a suit by the actual owner is barred by your state's statute of limitations!

What you are now seeing as evidence which must be impeached, may become affirmative evidence on your behalf.

If the notice of default and/or notice of acceleration appear defective, consider pleading the affirmative defense of conditions precedent.  But be careful how vigorously you pursue this argument if you need to rely upon the notice of acceleration to immunize yourself against later suit using the defense of limitations.

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Limited Now
In my case, the wrong party filed suit.  There is no assignment of the mortgage to the plaintiff.  I have argued standing and capacity.  I ran some discovery and obtained some evidence that makes the plaintiff's case pretty shaky!  The plaintiff also has several other serious problems with its case.

The servicer sent a notice of acceleration in 2005 and the wrong entity filed suit in 2006.

The statute of limitations on the debt and the lien ran in 2009.  If this suit (by the wrong plaintiff) is dismissed, with or without prejudice, the mortgage investor might clean up their case and refile maybe in 2011, but faces a rather daunting limitations defense.  The claim is already barred by statute in suits other than the one now before the court.

I believe that I will succeed in getting this current suit dismissed, if not in the trial court, most certainly on appeal.

In my case, the notice of acceleration may be worth the full mortgage amount.

Make sure that you keep all of the important documents in your case.  I had no idea how valuable that notice of acceleration was going to be when I began defending against the foreclosure.  I didn't really think things would stretch out this long.

A lot of good advice is available at this site!
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