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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Curious
Lets say you are in court for foreclosure. You have been brought to court by Company "B" who claims to be the holder of your note and mortgage. Their alleged assignment of mortgage is dated March 2, 2006. There is no assignment of the note, just an alleged copy of the original with the name of  Company "A" as the owner.

Now what weight would a document from the current Loan Servicer have that states that on June 23, 2006 they are the servicer of the debt for creditor Company "C"?

Is that evidence that can be used to show proof that Company "B" does not own the note or mortgage? Thank you.
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Moose
Curious wrote:
Lets say you are in court for foreclosure. You have been brought to court by Company "B" who claims to be the holder of your note and mortgage. Their alleged assignment of mortgage is dated March 2, 2006. There is no assignment of the note, just an alleged copy of the original with the name of  Company "A" as the owner.

Now what weight would a document from the current Loan Servicer have that states that on June 23, 2006 they are the servicer of the debt for creditor Company "C"?

Is that evidence that can be used to show proof that Company "B" does not own the note or mortgage? Thank you.


This isn't legal advice, but the shoe is on the other foot. They're suing for foreclosure and under the typical rules of civil procedure, they must prove that they standing to do so. The "weight" of their documentation is the crux of the matter and unless your attorney understands the documents and these issues and knows how to effectively raise a challenge to their standing, you're screwed. It's not just as simple as "produce the note."

Moose



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h gosh
It is possible that your mortgage and note has been bifurcated.  Are you in a "mortgage" state or a "note" state?  If a "mortgage" state, is your mortgage a "security" mortgage?  After you address that issue, you can address "who owns the note" "who owns the mortgage".  This is more complicated than most people realize, and the UCC may be controlling, then again, maybe not.  The Hague Convention may be involved.  A law of a State different that yours may be controlling.  How many Trustees are involved?  Do you have a "Delaware Trustee" involved?  If a CDO, who actually owns the "certificate"?  What Tranch are you in, and how many times has that been securitized?  Start with baby steps - find out first what type of State you live in.  After you have an answer, then find an attorney who knows what you are talking about.
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Curious
Thanks for confusing the heck outta me guys...lol. I am in Ohio. Mortgage state, Note state, I don't know. Aren't all mortgages "security"?

I do know that it appears from what I have read that the local courts favor the lenders and the supreme courts favor the homeowners. I have checked the county records and Company "B" has an assignment of mortgage from Company "A" recorded. Nothing about the note. I was just wondering if this letter from the servicer could help create a shadow of a doubt on ownership since it claims a third Company "C" is the owner and is dated after the recorded assignment of Company "B".
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Moose
Curious wrote:
Aren't all mortgages "security"?



Sort of. You really do need a local attorney.

Moose


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The Equitable One
Moose,

For a number of reasons we all need attorneys. But...

Few are competent in this area. Of those that are even fewer are willing to represent defendants. And of those fewer still are available. Then there is the issue of money. They want lots of it and most of us in this circumstance have little to noneof that.

Worse are the terrible tales of the many attorneys that file one short, worse than useless document, let the case founder, and then upon summary being granted plaintiffs, they simply slink away keeping all of the retainer.

While I have appreciated your insightful posts, perhaps the most beneficial one you could make would be instructions in re how to find affordable, available and competent counsel.

I've spoken with probably 250 attorneys in the past year and haven't found one willing and able to represent me yet.
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Equitable One,

Not sure where your located but I found one who does get it the other day in NY just no help for me. But it was nice to find out I'm not crazy! This one is a Alexander Paykin I believe. In Long Island. Which would be a NYC lawyer probably for the most part.

Best of Luck!

Kathy
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Moose
The Equitable One wrote:

While I have appreciated your insightful posts, perhaps the most beneficial one you could make would be instructions in re how to find affordable, available and competent counsel.


Good suggestion - I wish I had a magic-bullet answer to the affordability question. Because of the length of time involved (see below), attorneys are more than reluctant to take on these cases without a large up-front payment.

Whatever you do, don't fall for the pre-paid legal schemes. Start with your local bar association. Some offer free screening sessions. Also check with your local legal aid organization - one attorney at Jacksonville Legal Aid, April Charney, has been training and rallying support of other legal aid attorneys around the country.

The areas of competency I'd look for include:

Consumer rights
Mortgage lending and servicing
State and local real estate, property and title law
Foreclosure defense
Federal civil litigation (remembering that if you file suit in a local court, the servicers will almost always remove it to Federal court).

Things you want to know:

How much, if anything, do they charge for an initial consultation?

If they're in a firm, are there other members of the firm who have represented your opponent or are presently?

Are they well versed in TILA, RESPA, HOEPA, FCRPA, FACTA issues?

Are they aware of mortgage servicing case law? (Fairbanks, Ocwen, EMC?)


Things you want to have for them:

A historical time-line of events; call it a diary, if you will.

Copies of everything, organized so you can find whatever they ask to see.


Things you need to realize:

The average time from filing to settlement for civil cases last I looked was nearly eleven months. Yours could be significantly shorter if you're being foreclosed on and your counsel can successfully challenge their standing on the basis of not being the holder in due course. Having said that, they will probably get another bite at the apple so you may be only temporarily spared.

Except in some foreclosure cases (it varies significantly from state to state) your case against a servicer will probably never be heard by a judge, much less a jury. There will be months of paper being pushed around, a few hearings on motions, discovery, depositions, more hearings and at least one settlement conference. Less than one percent of civil cases get to the point where a judge or jury hands down a verdict, so it's a long, tedious road to a settlement.

You, not just your attorney or their staff, have to watch the court docket like a hawk; the court clerks are overloaded and that makes them error prone. Deadlines are cast in concrete.


There are a lot of consumer advocacy-oriented attorneys who are members of the National Association of Consumer Advocates http://www.naca.net

Not everyone is thrilled with NACA; your mileage may vary. Some of their members have won major cases against servicers and lenders. Some only do class actions. None of them are free.

You can, and should learn more about the civil justice system. I recommend you take a look at the free materials at Jurisdictionary and decide for yourself if you're ready to swim with the sharks by doing it yourself.

Hope some of that helps.

Moose

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Knows About Notes
This is NOT legal advice.  Moose has given you good counsel.  You need a lawyer.
 
That being said:
 
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Lets say you are in court for foreclosure.  You have been brought to court by Company "B" who claims to be the holder of your note and mortgage. Their alleged assignment of mortgage is dated March 2, 2006.  There is no assignment of the note, just an alleged copy of the original with the name of  Company "A" as the owner.

Law relating to promissory notes in every state is covered by the Uniform Commercial Code (UCC).  You may find the provisions of the Ohio implementation of the UCC generally within Title 13 of the Ohio Revised Code.  See http://codes.ohio.gov/orc/13 .
 
Read the provisions very carefully.  Read the cases in your state for a more complete understanding of the Ohio UCC. 
 
You will find that promissory notes are negotiale instruments and negotiable instruments are NOT assigned.  They are negotiated.
 
Negotiation is expressly defined within the Ohio UCC:
 
1303.21 Negotiation - UCC 3-201.
(A) “Negotiation” means a voluntary or involuntary transfer of possession of an instrument by a person other than the issuer to a person who by the transfer becomes the holder of the instrument.
(B) Except for negotiation by a remitter, if an instrument is payable to an identified person, negotiation requires transfer of possession of the instrument and its indorsement by the holder. If an instrument is payable to bearer, it may be negotiated by transfer of possession alone.
Effective Date: 08-19-1994
This is statutory.  Negotiation of a negotiable instrument -- a promissory note payable to an identifiable person (or entity) -- payable to Company "A" requires that the original note be endorsed either in favor of the transferee or endorsed in blank or to bearer.  And negotiation also requires delivery of the promissory note.

Therefore, a COPY of a promissory note which lacks an endorsement IS EVIDENCE that the ownership of the promissory note remains vested in Company A.

Possession of an UNENDORSED COPY of the promissory note would also appear to be NO EVIDENCE of delivery.
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Now what weight would a document from the current Loan Servicer have that states that on June 23, 2006 they are the servicer of the debt for creditor Company "C"?


This would seem to me to be NO EVIDENCE and NO PROOF as to either ownership or holdership of the promissory note by Company "C".

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Is that evidence that can be used to show proof that Company "B" does not own the note or mortgage? Thank you.

A document showing that an entity is servicing the debt for "C" would seem to undermine the evidence that "B" is the owner.  The absence of an endorsement on the promissory note itself PROVES that no entity other than "A" can be the owner.

 

Bear in mind that typically an owner OR a holder can enforce the promissory note.  The discussion above shows why ONLY "A" can be the owner.

 

By definition only the entity having actual custody of the original promissory note can be the holder. Possession of a COPY of the promissory note would NOT make an entity the holder.  While entities often produce affidavits asserting or avering that a particular entity is the owner and/or the holder it would seem to me that only production of the note is conclusive proof as to holdership

 

The fact that the evidence seems muddled would seem to me to undermine their case.  If an affidavit stated that "B" was the owner and the holder and one can show as a matter of law that "B" CANNOT possibly be the owner due to the lack of an endorsement then this would seem to me to rather critically impreach the credibility of the affiant's otherwise unsubstantiated assertion that "B" is also the holder.  That is if the plaintiff asserts that the affidavit is sworn evidence from a credible witness and one key assertion can be proventobe FALSE, why should one trust the other averment?

 

*

 

You really also need to use discovery to get the critical fact of the case.   

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Curious
Thank you Knows About Notes!

That was an awesome answer. I am in fact hiring an attorney and will be sure to include your explaination in the information I provide to them. Thank you for taking the time to explain the ropes in a way I could understand.
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That is a great explanation of UCC.  My loan is in Florida and it is the same premise.

The foreclosure documents I received had an allonge signed only by the original "lender."  The mortgagee was MERS as nominee for Homefield Financial and the Note payable to Homefield.  MERS assigned the mortgage and note shortly before the foreclosure action to U.S. Bank, as trustee.  U.S. Bank filed the original note with the court with attached allonge bearing only the signature of the VP of Homefield.  The line for "pay to the order of" is blank, therefore making this a bearer instrument under UCC.  I am challenging both the assignment and the "original" note.  I won't go into details right now regarding my challenge to the assignment.  My challenge to the note is based on the fact that the Homefield never assigned the note to MERS and MERS did not have authority to assign the note to U.S. Bank.  Additionally, I am challenging U.S. Bank as holder in due course as U.S. Bank was assigned the mortgage and note after default.  Also, I had mailed rescission letters to all 2 months before the assignment. 

Am I on the right track?
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Knows About Notes*
Knows About Notes*

* Knows About MERS, Too!

In proceeding, you need to bear in mind that MERS NEVER is either the owner of the promissory note.  EVER!

Nor is MERS typically the holder.  EXCEPT, MERS might be an articial holder only in the most nominal and artificial of ways.

That MERS is NEVER the holder can be readily PROVEN by reference to MERS' contract with its members, embodied in two documents:  MERS Terms and Conditions; MERS Rules of Membership.

But the BEST way to conclusively prove that MERS was NEVER the owner is to obtain a copy of the Nebraska Supreme Court case:  MERS v Nebraska Department of Banking and Finance, 270 Neb. 529; 704 N.W.2d 784; 2005 Neb. LEXIS 177 (Neb. 2005).

But every bit as important as the case itself is the MERS Appelant's Brief in MERS v Nebraska. In its brief, MERS represents to the Nebraska Supreme Court in a variety of ways in the strongest possible language that it is NEVER the owner of the promissory note or the mortgage indebtedness.

I think that there is some other discussion about this case on this message board. Do a Forum keyword search on MERS and Nebraska.
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