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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This is a question for anyone knowing about TILA, Reg Z, and loan documents.

Preparing lawsuit on what I thought was a TILA and Reg Z violation.

I received today a packet of documents that were presented to me on the day of signing the loan and I apparently signed.

Lender sent loan estimate to me about 7 days before stating that the loan would be:


Did not receive any of the disclosures about terms, etc.


Day of signing (closing)  stack of loan docs put in front of me to sign.  Docs had little side markers, like those plastic Postit strips that point to where you sign.

The note and deed of trust say the loan is now  $120,000.00 with new terms I had not been told about.  Seeing for first time.

  I did not received those additional funds.

Apparently I signed some documents (legal length paper) called the Borrower's Instructions that had the right of rescission paragraph.

All I recall receiving when I left got was a photocopy of the Promissory Note and Deed of Trust.

I give example below of the document, date, and page no.

1.  Borrower's Instruction  -  01-10-07  -  Pages 1 of 3

2.  Addendum #1  -   01-09-07  -    Pages 1 of 2

3.   Addendum #2  -  General provisions  -  01-09-07   -   Pages 3 of 4

I've been reading 15 USC on TILA and Reg Z, and am not finding something that relates to this situation.   Does this mean I don't  have a cause of action under TILA and Reg. Z?

Also, on all the loan documents, including the "borrower's instructions, only one  of the two beneficiaries signed because he was the only one at the office that day.

These were two investors.  both names on note and deed of trust as beneficiaries.

Are the documents still valid with only one beneficiary signature?  And no, nothing anywhere says the one that appeared to handling everything was acting in the other's behalf.

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Truth in Lending Act  -  3 Day Cooling Off Period

You probably still have a valid claim.  Re-read TILA and Reg Z, again.

It is clear about this aspect:

The Right to Rescind notice must be on a separate document that identifies the rescission period on the transaction and must clearly and conspicuously disclose the retention or acquisition of a security interest in the consumer's principal dwelling; the consumer's right to rescind the transaction; and how the consumer may exercise the right to rescind with a form for that purpose, designating the address of the lender's place of business.

It also states, the lender is required to provide you copies of the loan docs to take home and think it over.  You are also must sign the form that states you waive your right to rescind.

Burying the right to rescind it in a paragraph on page such and such doesn't cut the mustard. 


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Knows About Closings
It is a really BAD IDEA for ANY BORROWER to go to a loan closing without an attorney representing the borrower.  No business person engaged in real estate would ever do this.

The closing attorney is NOT representing the borrower, even though the borrower mayhave to PAY THE COST of theclosing attorney.

You are going to find that courts almost universally IMPUTE to the signatory of documents that the person has read and understands what he or she is signing.  The "I didn't read what I was signing" defense rarely gets you very far.

Court are rarely going to set aside contractual transactions freely entered into by consenting parties where the borrower claims NOT to have read and understood the contract EXCEPT inthe most unusual of cases, such as where the borrower can be shown to be legally incompetent (senile, retarded or not of legal age), blind, unable to read and understand English, etc.


Typically, there is a Good Faith Estimate made upon application or at least in advance of closing.  The Truth In Lending Disclosure and the HUD-1 Settlement Statement are two of the key documents prepared and signed at closing in addition to the promissory note and mortgage, deed of trust or other mortgage security instrument.  The notice of the right of recission is yet another.

I am somewhat confused by your explanation of the investors and beneficiaries.

A promissory note is a negotiable instrument and those signing are typically described as "makers".  The mortgage or deed of trust has a grantor -- the borrrower -- and a grantee, the Lender.  In the case of MERS mortgages, MERS is also identified in the instrument as a benficiary and nominee for the Lender.  In the case of a deed of trust, there is also typicaly a named trustee.

Are you saying that only one of two named makers actually signed the promissory note and mortgage?

If so, it is quite possible that ONLY the person signing is actually liable.  But this also depends rather uniquely on the precise facts of the case and the law of your jurisdiction.  If BOTH parties made application, and both were clearly participating and benefitting from the transaction, a court might very well look past a failure to sign, particularly if the signature was missing from onlyone or two documents, but present on others.

On the other hand, if two persons had applied for a loan and attended the closing together and then one of these two declared that he disagreed with the loan terms and REFUSED TO SIGN and LEFT THE CLOSING and the remaining party executed the documents, it would be pretty clear that the party who left and didn't sign would NOT be liable under the note or mortgage.  (Whether anyone had any other valid cause of action against him for walking away from the deal is another matter.)


If you went to a closing and thought you were borrowing $100,000, but instead signed a note for $120,000, and ONLY ACTUALLY RECEIVED $100,000 at the closing, then this would seem to be a rather classic origination fraud.  Unfortunately YOU SHARE MORE THAN A LITTLE CULPABILITY BY YOUR FAILURE TO READ WHAT YOU WERE SIGNING.

The secondary mortgage investors, including mortgage trusts, which PURCHASED your loan after origination relied on the verity of the documents YOU SIGNED contained in the loan file THEY PURCHASED.

You can rely upon the fact that they will interpose a holder in due course defense and basically tell you that your cause of action for fraud is against the originator, NOT the mortgage investor.  If the TILA paperwork is filled out incorrectly, you may still have a valid TILA claim.  But IF they got you to sign an inflated promissory note, I suspect that they also tricked you into signing an inflated but matching TILA, as well.  And if you didn't sign the TILA, they might very well have simply FORGED YOUR SIGNATURE anyway.

Proving such a forgery, IF the signature looks at all like YOUR OWN signature against the backdrop that you actually attended the closing and signed other documents which were notarized (the deed of trust) is going to be one hell of a burden.


In conclusion, let me add that you should ALWAYS OBTAIN A COPY OF EVERY DOCUMENT YOU SIGN AT CLOSING.  When you sign, you are typically acknowledging RECEIPT OF COPIES.  Disreputable lenders and mortgage brokers very often send you on your way WITHOUT COPIES of the critical documents.  This is a key part of their MO.

You really should discuss your situation with a qualified attorney specializing in real estate, consumer debt and/or bankruptcy.
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Janet - thanks. Found section you referenced. 

Knows about Closing  -  I am not experienced, so if I am using wrong terms, please forgive and please be patient.

Whatever the lender is called - in my case were two private investors.  I made payments to them.

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Barbie don't get discouraged by Knows about Closing.  He means well.

There is a much bitterness on this site.  Many unscrupulous lenders have destroyed people's lives and the unprepared courts are ill equipped to deal with the onslaught of fraud overwhelming the civil courts.

You are probably in California.   A beneficiary is a legal term and a bank jargon.

John Doe, was the beneficiary under the Deed of Trust, recorded -----

Essentially it means that Doe is the rightful and legal holder of the Note/Deed of Trust.

I am not sure of the answer to your question about a beneficiaries signature.   If there were documents with terms, but one beneficiary was not present and nothing on the documents state the other beneficiary had authority to act in the other person's interest, then what does that mean about the documents.

I won't insult you by telling you to find an attorney.  I know that attorneys are part of that small group of society that can afford justice.  The rich and famous. 

Try researching contract laws and see if they have a section on the requirements of beneficiaries.  Also research Deed of Trusts laws.  Knows About Closing mentioned "Origination Fraud."  Not sure what that is, or, where to look.

Hopefully he will come back and provide you with more detail on what or where to research it.

Good fortune in your quest for justice.


Barbie wrote:

Also, on all the loan documents, including the "borrower's instructions, only one  of the two beneficiaries signed because he was the only one at the office that day.

These were two investors.  both names on note and deed of trust as beneficiaries.

Are the documents still valid with only one beneficiary signature?  And no, nothing anywhere says the one that appeared to handling everything was acting in the other's behalf.

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