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.
Articles |The FORUM |Law Library |Videos | Fraudsters & Co. |File Complaints |How they STEAL |Search MSFraud |Contact Us
Allan S.
My mortgage holder recieved stay relief in my Chapter 13,  I finished the 13 plan minus the mortgage company anyway and recieved a discharge in 2007, turns out the mortgage was never recorded since the closing in 2001, in 2008 they filed in state court to try and record the mortgage, judge said they couldnt unless they can say why it was never recorded, they couldn't, so they withdrew the suit. 

Question, Is it possible that I own the property free and clear?  Since I did recieve a discharge and they don't have a recorded lien on my title and also becuase they were never a secured creditor in the BK Court due to the fact the mortgage was never perfected. 
Quote 0 0
Knows About Liens
You are posing a very complicated fact situation and asking us to comment about it absent either the specifics as to jurisdiction or precise facts that might be determinative.

*

In most places, a mortgage transaction involves a promissory note and a mortgage, deed of trust or similar mortgage security instrument.  The promissory note under the UCC is a negotiable instrument and evidences the indebtedness.  The mortgage, deed of trust or other mortgage security instrument pledges real property as additional security for the repayment of the promissory note.

In some places, when a mortgage is for the purchase of real property, the deed also recites a vendor's lien, which is additional protection for the lender.

When a debtor files for bankruptcy, creditors typically present claims to the bankruptcy court through a proof of claim procedure.  The debtor is entitled to contest such claims.

Separately, a creditor can seek a relief of stay to institute suit or, more often, continue a suit instituted before the bankruptcy filing.  Again, the debtor can oppose the relief of stay.

*

If, in an adversary proceeding, a debtor successfully contested a claim OR if an unsecured claim was expressly disharged in bankruptcy, the debt might stand extinguished or, at least, the debtor might have a strong res judicata argument against relitigating that debt.

Where the matter was successfully removed fromthe jurisdiction of the bankruptcy court by a relief of stay, it seems more likely that the bankruptcy court has not taken anyaction which would preclude the collection of the debt.

*

In most jurisdictions, it is NOT necessary to RECORD the mortgage to institute or maintain a suit on the promissory note or to foreclose the mortgage.  If recording IS required in your jurisdiction, it sounds as though they have a bit of a problem.

This seems unlikely to preclude them from suing on the promissory note.  But absent a valid mortgage lien, they might have difficulty reaching your home in those states that recognize homestead.  And you might be able to discharge any new unsecured judgment in a new banruptcy proceeding.

Also, bear in mind that most states have statutes of limitation on suits on a note.  These vary from state to state.  Periods during which a party was injoined or subject to a civil stay may possibly be excluded from the statute of limitations.

YOU HAVE A LOT OF RESEARCH TO DO TO GET TO THE CORRECT ANSWER.  And in this sort of circumstance, it is probably very much in your interest to consult a good consumer debt / bankruptcy attorney about your rights.

Given the overall volume of foreclosure actvity and their prior failure to obtain the result they sought, I could easily see the matter languishing for some time.  Perhaps if you play your cards right you CAN escape the promissory note either by limitations OR through a new bankruptcy proceeding.

I believe that the financial crisis as to mortgage default and foreclosure is onlyjust nearing a midpoint.  While we are now past the peak with regard to subprime distress, there is another round of coming payment resets and an entire new wave of prime mortgage defaults and foreclosures coming.  Unless otherwise counseled by a lawyer better acquainted with your facts and the law of your jurisdiction, I would be inclined to let this meltdown work FOR YOU. 

Your case is complex.  The mortgage foreclosure mills are volume operations.  They are already CHOKING on the existing volume.  They do NOT have the time to litigate cases like yours without sacrificing numerous other simple matters.

If THEY let the matter languish, so should YOU.  I cannot imagine that their case gets any better with time, even absent the statutory limitations period.

Do your research.  Consult a lawyer.  Consider a good defensive strategy, possibly waiting them out.  Be prepared to file another bankruptcy petition, if necessary.  Structure your financial affairs accordingly.
Quote 0 0
Knows About Liens
Allan:

Also, watch your vocabulary.  Your plaintiff seems to have a proof problem.  It is unclear to me WHY their failure to RECORD the mortgage is causing them problems.  But in general, if they are having trouble proving the facts of the mortgage indebtedness, as to the promissory note, the mortgage or otherwise, you need to becareful NOT TO HELP THEM PROVE THEIR CASE.

If and when they refile, they may very well come at you with discovery and make YOU their witness against yourself.

Bear in mind that in public postings, there is NO ATTORNEY CLIENT or other priviliege.

Your FACT SITUATION is sufficiently unusual that almost any other specific details might be identifying.

Your posting beginning with "My mortgage holder"... seems to acknowledge the mortgage lien.

Make sure that your posts AVOID making ANY admissions!

Try "the plaintiff", "the alleged mortgage holder", "the party alleging a claim", etc.

If Allan is your REAL NAME, I would REFRAIN from ANY more posts under this name and pose various other questions underone or more pseudenyms or handles.  Also, AVOID putting specific information about your case that might be identifying.
Quote 0 0
Alan S.

ok, thanks, will refrain from anymore positings.

Quote 0 0
Knows About Liens
Allan:  Do NOT go away and do not hesitate to participate.  But be VERY CAREFUL about posting many identifying specifics.  Use one or more handles.  Ask focused, topical questions that do NOT disclose key unique facts in your case.  Avoid posts that, if discovered, could be construed as admissions.

But DO use the Forum to LEARN and to SHARE. 
Quote 0 0
Allan S.
ok gotcha and thanks for the insight.

Will def. take your advice and wait them out.  I did speak to attorney who thought I had a good case for owning the property free and clear becuase of the discharge, also in the state I am in, you must have a recorded mortgage to foreclose, the recording info must be part of the foreclosure, but either way I am sure I am not close to having this resolved for better or worse.


Quote 0 0
Write a reply...