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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The players: Maker, Lender, Banker, Freddie, Servicer, Lawyer, Witness, Notary, Law-firm.

The story: Maker makes a note and executes a mortgage both in favor of Lender in 2003.  Lender sells the note to Banker and records a mortgage assignment from Lender to MERS as nominee for Banker.  Time marches on.

In 2010 Servicer hires Law-firm to initiate foreclosure. Law Firm does its thing and executes an engineered mortgage assignment from MERS as nominee for Banker to Freddie.  Everybody on the assignment works for Law Firm.  The RETURN TO is Law Firms principal.  Notary and Witness are the same legal assistant who works for Law Firm.  The MERS Assistant Secretary is actually a Lawyer at Law Firm.  I have at least 8 objections and points of discovery to this assignment. 

Law Firm begins a power of sale foreclosure under NH law.   In 2010 Maker files Chapter 13 bankruptcy to stop it.  Maker makes a post-petition mortgage payment and his first catch up payment to the trustee.  In November Law Firm files a proof of claim with the court that includes a debt sheet, the Note, the Mortgage.  Two things happened.

First, the POC was a little higher than the number I named, so the Trustee files an immediate motion to dismiss for lack of plan funding and I file an objection to motion to dismiss stating I'll either extend the plan or pay a few bucks more, BUT I state in my objection that I'm going to come in with an objection to that POC as well.

The other thing that happened is that I noticed that there's an allonge to the Note that indorses the Note from Lender to Banker.   On page 3 of the actual note is an indorsement in blank from Banker to Bearer.

The allonge (first sale of note) contains a stylized indorsement that begins:

                                        NOTE ALLONGE
IN THE AMOUNT OF: right amount
FROM:  maker
TO: Lender

Pay to the order of: Banker, signed: Lender WITHOUT RECOURSE

Once I saw this I stopped making my post-petition mortgage payments, so they got nothing in November, December, January, February or March.  Servicer and Lawyer haven't said a word, including filing a motion for relief from stay...  That has my lawyer, myself and everybody who hears of it mystified... I'm just out here hiding in the weeds.

Trustee is slightly irritated at my lawyer wanting to know what takes so long to either file a new plan or an objection.  We cry "research time" so the trustee has given us until March 15 to come in with that new plan or an objection.

My argument against this note is that since the first indorsement misidentified the note then indorsement from Lender to Banker did not occur, therefore Banker was never a holder, but only a transferee with rights to enforce.  

A transferee in this circumstance has a lot of options.  They can pursue me in their own name, they can rescind the deal and put the note back to Lender.   They also have a specifically enforceable right to Lender's unqualified indorsement (e.g. no "without recourse") and force Lender to effectively become my cosigner.  This being 8 years ago now, all of those options are unavailable primarily due to laches and statute of limitations on contracts.

Banker then negotiated the note to Freddie but they had no right to do so.  A transferee with the rights of a holder to enforce can't negotiate a note, but that's what they did.

That leaves Freddie as a transferee of a transferee and thus without any rights to the note whatsoever, but they can go after Banker if this happened within the last few years.  Looking at the fabricated assignment makes it look like they just got the note last year but mortgage assignments don't really count because their actions would be on the Note.


From here I can see several options.  In any event this note is going to be discharged and any in personam obligations to this note will be extinguished, but there are still in rem remedies available.   I'd have to take on the in rem (mortgage) fight in state court, unless my judge takes a decidedly different stance and wants to hear this stuff.  He has not been interested yet...

There are a number of strategies here.  I can argue about the note in federal court and get the judge to agree that Freddie has no rights and declare something to that effect.  Then I can ask the judge to void the lien and get blasted out of federal court back to state court. 


I suppose I can just walk into state court and file a quiet title action and start the fight all over again and try to get a state court judge to agree with me.

Thoughts?  Ideas?

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start deposing everybody who claims a piece of this deal or who has submitted opposing affidavits on "personal knowledge." should be enough for the bk judge to throw them out of bk court and have them seek their remedies in state court. then go for the quiet title. you will have the bk judge's decision and order to back up your claims in state court. they will be persuasive authority as to standing issues, i would think.
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The first thing I'm doing, regardless of venue is moving to disqualify Law Firm from the case because I have specific objections and questions for the Lawyer who executed the assignment that will definitely be adverse to his clients.  During the course of that motion I'm letting it be known that this Law Firm is a NH foreclosure mill no different than Baum in NY, Shapiro or Sterns in FL, etc.

I'm thinking right here may be the point to file quiet title, just after Law Firm gets DQ and before Freddie has time to retain new counsel, move the files, etc.

I should add that Servicer has a 2nd in their own name, taken out in 2006.  They'll respond to quiet title and I can't wait to say "Show me the note" ha ha...

but its funny you said "depose" everybody... I've just started thinking about what I want to ask via request for admissions and discovery questions to ask... I'm only allowed fifty per adversary and can't find a limit on RFA questions, but I'm also a newbie at my local rules... Don't know them half as well as i know UCC article 3.

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