Mortgage Servicing Fraud
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tmc
State Law - "An instrument must not be recorded until the power of attorney authorizing the execution of the instrument is filed for record in the same office."

In my case, the assignment of beneficiary of deed of trust was executed by an attorney in fact and recorded with the county recorders office but the POA was never recorded.

So is the assignment of the beneficiary void, voidable or completely valid?

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t

tmc:

 

Your query raises an issue that Mr. Roper has discussed repeatedly in prior posts.  It appears that you have been drawn in by some specious arguments propagated by debt elimination scam swindlers.  These folks have created a variety of myths which form the basis for scams in which they seek to defraud distressed borrowers by holding out the false hope that some defect, such as that you describe, might enable a borrower to void a mortgage or deed of trust and obtain a free house.

 

I will refer you to several of Mr. Roper's prior posts on this subject, but will simply abstract the the two key arguments in this way.  First, issues associated with the validity of a deed or assignment of mortgage or deed of trust are usually separate from the issue of the validity of the recording.  In most places, recording is not necessary to give effect to an instrument.  Instead, recording merely perfects the instrument for the purposes of ascertaining priority of competing claims as between different grantees under different instruments.  Seer Mr. Roper's posts for more details.

 

Second, issues with respect to the authority of the person executing the instrument and thereby the validity of the grant are usually determined under provisions of the law of agency.  Mr. Roper posted a very informative explanation of how agency works, including an explanation as to ratification in another thread.

 

You need to look to the statute of frauds of your jurisdiction as well as the recording acts to obtain a clearer understanding of how the law might apply to the precise facts of your case. 

 

See also these posts discussing the statute of frauds / recording acts issue by Mr. Roper:

 

"SUBPOENA THE NOTARY?" (09/19/10 at 08:38 PM)

http://ssgoldstar.websitetoolbox.com/post/show_single_post?pid=41933116&postcount=4

 

Does this argument hold water (06/24/11 at 02:41 AM)
http://ssgoldstar.websitetoolbox.com/post/show_single_post?pid=1269144180&postcount=6

 

Quite Title Action (06/24/11 at 02:41 AM)
http://ssgoldstar.websitetoolbox.com/post/show_single_post?pid=1267801032&postcount=15

 

Quite Title Action (03/15/11 at 06:09 PM)
http://ssgoldstar.websitetoolbox.com/post/show_single_post?pid=1267690288&postcount=3

 

Anyone know who LITTON'S robo-signer is? (02/14/11 at 08:44 PM)
http://ssgoldstar.websitetoolbox.com/post/show_single_post?pid=1267278682&postcount=27

 

Recording date vs. notarized date: Which one determines assignment date? (01/05/11 at 01:00 PM)
http://ssgoldstar.websitetoolbox.com/post/show_single_post?pid=1266735237&postcount=3

 

Preserve issue for appeal (12/23/10 at 02:42 PM)
http://ssgoldstar.websitetoolbox.com/post/show_single_post?pid=1266593584&postcount=2

 

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t

tmc:

 

On the agency and ratification issues, first read Mr. Roper's thread:

 

"Agency, Powers, Principal and Agent"

http://ssgoldstar.websitetoolbox.com/post?id=5136472

 

Contibutor Gary summarized several of Mr. Roper's posts on this subject several months ago in his post within the thread "Is it just me or did the judge really fail here?" (12/30/11 at 09:46 PM):

 

http://ssgoldstar.websitetoolbox.com/post/show_single_post?pid=1271598204&postcount=4 

 

Use the Forum's search facility and search using keywords which appear in Mr. Roper's posts (e.g. "agency principal agent ratification", "statute frauds recording acts").  You will find that there are many informative posts here at the Forum.  However, beware, the Forum also has a number of trolls who will seek to try to swindle you or draw you into one of several debt elimination scams.

 

You should particularly be wary of posts by Mike H. and Ann.  The former is a swindler.  The latter is a spam artist who seems to be a confederate or possibly in the employ of one or more disreputable attorneys.

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tmc
Thank you for the information.  It cleared things up for me but also raised another question....

This is a non-judicial foreclosure.  State law requires that all assignments of beneficiary must be recorded prior to a non-judicial foreclosure.   Combine that with the state law regarding recording: "An instrument must not be recorded until the power of attorney authorizing the execution of the instrument is filed for record in the same office."  So in short, they had to record the assignment in order to foreclose.  But they shouldn't have been ABLE to record the assignment without first recording the POA.

So yes, I understand that the principal could ratify the agent later on and then foreclose all over again.  But, does this mean assignment and the foreclosure which has already happened; is void?



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t

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So yes, I understand that the principal could ratify the agent later on and then foreclose all over again. But, does this mean assignment and the foreclosure which has already happened; is void?
 

Once again, you need to look to the express statutory language of the laws of your state and the decisions of your state's courts to determine the effects of a failure to properly record a POA.  This would not be a defect in most places!

 

Also, bear in mind that the POA MAY have been recorded but not simply recorded over and over again in respect of each transaction.  Better practice where a POA has been previously recorded is to cite the prior recorded instrument in the assignment.

 

But if the prior POA is NOT expressly recorded together with the assignment and the prior recorded POA is not noted by book and page in the assignment itself, this still might not be a defect if it can be shown that the POA is actually recorded.

 

I have seen MANY, MANY POAs recorded in jurisdictions throughout the country.  Some of these appear to be forgeries.  Others are probably valid.  I think that you are probably reaching if you think that the failure to record an assignment together with the instrument would void the instrument.  The effects of a later ratification of the assignment by a belated execution or recording of a POA are also unclear.

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tmc
Ok, so in my state, a conversion of real property must be in writing and if subscribed by an agent, the authority of the agent must be in writing subscribed by the principal.....OR the agreement is invalid.

Ok, what does INVALID mean?  Let's assume there was not a written POA at the time the agent signed on the Deed OF Trust.  Does that mean the assignment of the Deed of Trust is void even if the do get a written POA later on?

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t

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Ok, so in my state, a conversion of real property must be in writing and if subscribed by an agent, the authority of the agent must be in writing subscribed by the principal.....OR the agreement is invalid.

Ok, what does INVALID mean? Let's assume there was not a written POA at the time the agent signed on the Deed OF Trust. Does that mean the assignment of the Deed of Trust is void even if the do get a written POA later on?

Simply because an instrument is ineligible for recording, it does not follow that the instrument is void.  A deed or other instrument that meets the requisites of a state's statute of frauds might be valid and still ineligible for recording.

 

Such an instrument would still be valid against the maker, but just wouldn't be entitled to be recorded in the deed records.  Whether the ineligibility of an instrument to be recorded precludes foreclosure by private sale under a state's laws would depend upon the wording of that state's statutes and the cases interpretting those statutes. 

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tmc
I'm sorry, but I'm confused.  Could someone help me out with the Statute of Frauds?  Is Statute of Frauds only applicable between those directly in the agreement?  As a third party, can I utilize the Statue of Frauds?

Specifically, this is my state's statute and it's under the Title of Evidence

Certain agreements to be in writing. 
In the following cases the agreement is invalid, unless the same or some note or memorandum thereof, be in writing and subscribed by the party charged, or by his agent. Evidence, therefore, of the agreement cannot be received without the writing or secondary evidence of its contents:
4.  An agreement for the leasing, for a longer period than one (1) year, or for the sale, of real property, or of an interest therein, and such agreement, if made by an agent of the party sought to be charged, is invalid, unless the authority of the agent be in writing, subscribed by the party sought to be charged.

As I read the statute above, I thought the lender would not be able to bring an Assignment of the Deed Of Trust, which was signed by an attorney in fact,  into evidence unless they had a written POA to go with it.


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Stan

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4. An agreement for the leasing, for a longer period than one (1) year, or for the sale, of real property, or of an interest therein, and such agreement, if made by an agent of the party sought to be charged, is invalid, unless the authority of the agent be in writing, subscribed by the party sought to be charged.

As I read the statute above, I thought the lender would not be able to bring an Assignment of the Deed Of Trust, which was signed by an attorney in fact, into evidence unless they had a written POA to go with it.

 

I wouldn't pretend to speak for t nor can anyone make a certain pronouncement in respect of only the small snippet of law provided without either identification of jurisdiction or studying the cases there, but it seems to me the the plain ordinary meaning of the statute you identify would show that an agent would have had to have written authority in advance of executing an agreement for the sale of real estate or an interest therein.

 

But this provision does not seem to require that the authority be recorded in advance of assertion of such authority.  As t has pointed out, in most states recording is not necessary to give an instrument effect.  The effectiveness of the instrument is controlled by the statute of frauds.  Rather, recording only effects the priority of competing instruments from the same grantor. 

 

If you believe, based upon the quoted language, that a failure to record the POA voids a deed or assignment, I suspect that you have no case at all.  As far as I know, the law has never required the prior recording of a POA to give effectiveness to a deed anywhere in the United States.

 

Mr. Roper has previously posted some discussion about the statute of frauds and the recording acts.  Generally, he seems to have a pretty good handle on these issues and many of us have learned from him.

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texas
Stan said: "Rather, recording only effects the priority of competing instruments from the same grantor. "

Depends on the state and the laws that apply to the security securing.
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tmc
I don't believe the failure to record the POA will affect the assignment. 

I am hoping that the fact that an assignment was signed of by an "attorney in fact" who in fact was never charged with the authority by the principal can void the assignment.

I could give a rip about the recording.  And yes, I know the principal could ratify the POA latter but I don't think they can make that retroactive to give the agent the power to execute the assignment.  BUT, I don't think the principal would ever ratify the POA. 

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texas
Possible, that in certain states where recordation of an assignment as it affects title to real estate is required may require that a power of attorney (POA) be also recorded at the time the assignment is filed. One needs to look at all applicable laws, not just a selected few.
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xyz

I think one would be advised to follow t's suggestion re:

 

"See also these posts discussing the statute of frauds / recording acts issue by Mr. Roper:"

"SUBPOENA THE NOTARY?" (09/19/10 at 08:38 PM)

http://ssgoldstar.websitetoolbox.com/post/show_single_post?pid=41933116&postcount=4

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texas
t said: "Simply because an instrument is ineligible for recording, it does not follow that the instrument is void.  A deed or other instrument that meets the requisites of a state's statute of frauds might be valid and still ineligible for recording."

Would it not be wise to know the precise meaning of each instrument.

Deed
General Warranty Deed
Special Warranty Deed
Mortgage
Deed of Trust
Security Interest
Security Instrument

Many names but different laws apply. Research and know the difference.
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t

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t said: "Simply because an instrument is ineligible for recording, it does not follow that the instrument is void. A deed or other instrument that meets the requisites of a state's statute of frauds might be valid and still ineligible for recording."

Would it not be wise to know the precise meaning of each instrument.

Deed
General Warranty Deed
Special Warranty Deed
Mortgage
Deed of Trust
Security Interest
Security Instrument

Many names but different laws apply. Research and know the difference.

 

Agreed!

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t

Quote:
Possible, that in certain states where recordation of an assignment as it affects title to real estate is required may require that a power of attorney (POA) be also recorded at the time the assignment is filed. One needs to look at all applicable laws, not just a selected few.

 

Agreed.  While the UCC is fairly uniform nationally, state implementations of the statute of frauds and recording acts vary widely.

 

Also laws setting forth the requirements for a non-judicial sale vary widely.

 

The effects of non-compliance with select provisions may be quite different in different places.

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