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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Ken
Here is my situation:

Currently 3 months into the 6 month redemption period.

MERS foreclosure in April, just days prior to the Saurman Decision.

Chase is the investor and servicer.

Mortgage balance 350k, sold at Sheriff's Sale to a 3rd party for 100k, home is worth approx. 200k.

I am on title and note, my girlfriend is on title only, NOT on the note. It was  NOT quit-claimed or conveyed to her, she has been on title since the very beginning.

She has the legal right of redemption, a credit score of over 800, more than adequate income and extremely low DTI ratio.
We have tried to get her a mortgage, and after 12 failed attempts we hear the same reason every time: "The computer can't figure out how to prepare a package for the underwriters because she is a current owner. The computer says she would need to re-fi......" 
It sounds like a no-brainer to me, loan 80k on a 200k home to a person that has live there for 15 years and meets all qualifications to receive at least a 400k mortgage on any other property. There is no legal reason she cannot get a mortgage, it does not need to be an arm's length transaction as she has the right of redemption.  I cannot wrap my brain around the denials.

I am now considering legal action to tie this up in court, to what end I cannot say, but I will meet with an attorney next week. I imagine he will propose a quiet-title action and try to have the foreclosure set-aside due to the MERS issue.

I guess I am seeking thoughts and strategies from the minds on this forum.
Also, any ideas on securing a mortgage in this situation would be helpful as that is the preferred course of action for us.

Thank you in advance.
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Ginger
Have you tried a credit union? Sounds like a loan credit unions would like. You might have to open an account, but usually the required amount to open a member account is minimal. 
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Ginger
One more thing, it might be good to take a copy of the note to show that she is not liable for the debt, which in most states creates a deficiency judgment after foreclosure. It could be that the underwriters are put off by that because she is showing as an owner. It's surprising how brain dead some loan officers are without the push-button intelligence. 


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jeff
I'm no expert, so this might be totally wrong...

You said that your GF was not on the note, but was her interest in the property identified in the mortgage?  (the note is just the loan, and the mortgage is the security instrument to ensure that you pay on the loan).  If she was not listed in the mortgage, then presumably she still owns half the house.  An owner can only mortgage that which they own.  In this case, if you and your GF were joint owners, you could only mortgage your portion of the property.  Similarly, the bank can only reposes the portion of the interest secured by the mortgage, which if she was not identified, would only be your half of the house.  So if she did not mortgage her half of the property, she theoretically should still own her half.

Maybe an action to quiet title, asserting that she still owns half the house would be an option.

Other than that, i would consider a local lender who is willing to meet in person to understand the details of the situation.
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Jeff,
She is identified on the title and mortgage, not on the note/loan.  We are listed as joint tenants in common, which in Michigan does not divide the proerty up into "shares".

Local lenders who meet face-to-face seem to be a rarity, I am still searching.


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MSF Admin
Not to distract from the thread's subject heading, this news relating to MERS just came over from Living Lies and we thought it was worth posting to this thread.


MERS and Fannie Mae sue Short Sale Seller and Buyer


Licensed Real Estate Agent

Camarillo, CA

July 04, 2011

OMG! Just when you think you've seen it all, along comes a new horror story that makes the thought of doing short sales even more disgusting than before!!

Because of our intense hatred of all banks (BofA and Chase head the top of the list) we decided to stop doing short sales, and most conventional real estate transaction last summer and have been buying and flipping properties instead!

The last short sale we did was one we were referred to in October of 2009 (no good deed goes unpunished!!). The client (Tom) had recently lost his job due to downsizing and, to make matters worse, his mother had been diagnosed with a life threatening disease. There was no way we could turn this opportunity down to assist him so we took the listing on his one bedroom condo in southern California. He had purchase it in 2007 for $224K and we figured the current value was about $125K. We put it on the market and got an offer for $130K within a couple of weeks! Tom moved out of state to assist his mother in her remaining days on earth and we were happy to have an offer. After 5 months of negotiating with BofA (loan servicer) with 2 different negotiators, we finally got approval for a sale price of $123k!! (First negotiator said it was worth $180K!!!- Surprise)!

We closed the deal in April, 2010 and both the Seller and Buyer were ecstatic! All was right with the world!

Fast forward to July 2011! Last week, we received a document from our Seller that he had received. Are you sitting down? It was a LAW SUIT on behalf of MERS and Fannie Mae (Plaintiffs) against the Seller and Buyer (Defendants) and a possible 23 other defendants, (Does) who are at this point unnamed!

The Law Suit maintains that: ------------"The Substitution of Trustee and Full Reconveyance on the County records which purports to reconvey MERS's interest in the property is a mistake and was not properly prepared or recorded by ReconTrust. An actual controversy has arisen and now exists between Plaintiffs and Defendants concerning their respective rights and duties in that Plaintiffs contend that the Substitution of Trustee and Full Reconveyance is a mistake and, therefore, of no force or effect which should be stricken from the public records and that Fannie Mae's Deed of Trust is valid and enforceable.!"

I thought that the movie Too Big To Fail was unbelievable but this is ABSOLUTELY INCREDIBLE!!! Here is MERS (those bastards who were identified on 60 minutes as putting phony signatures on thousands of mortgage documents) maintaining that Recon Trust (not a party to the suit) MADE A MISTAKE? They did not properly prepare or record the reconveyance of the loan!!!

To top it off, the scum sucking lawyers (and I apologize to any scum out there that may be offended by the comparison) have filed a LIS PENDENS on the property such that the new buyer could not sell the property if she wanted to!!!!!

This lawsuit FAILS to mention that monetary consideration of $123K was ACCEPTED by BofA for the purchase of the property!!

I have to stop because my blood pressure is getting dangerously high!!!!

Has anyone EVER seen this before!!! I suspect that Fannie and MERS are probably putting these lawsuits out en masse in the hope that- WHAT- they get the property BACK so they can sell it now for $89K?

ABSOLUTELY AMAZING!!!!

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Bill
MSF Admin wrote:
Not to distract from the thread's subject heading, this news relating to MERS just came over from Living Lies and we thought it was worth posting to this thread.


MERS and Fannie Mae sue Short Sale Seller and Buyer


Licensed Real Estate Agent

Camarillo, CA

July 04, 2011

OMG! Just when you think you've seen it all, along comes a new horror story that makes the thought of doing short sales even more disgusting than before!!

Because of our intense hatred of all banks (BofA and Chase head the top of the list) we decided to stop doing short sales, and most conventional real estate transaction last summer and have been buying and flipping properties instead!

The last short sale we did was one we were referred to in October of 2009 (no good deed goes unpunished!!). The client (Tom) had recently lost his job due to downsizing and, to make matters worse, his mother had been diagnosed with a life threatening disease. There was no way we could turn this opportunity down to assist him so we took the listing on his one bedroom condo in southern California. He had purchase it in 2007 for $224K and we figured the current value was about $125K. We put it on the market and got an offer for $130K within a couple of weeks! Tom moved out of state to assist his mother in her remaining days on earth and we were happy to have an offer. After 5 months of negotiating with BofA (loan servicer) with 2 different negotiators, we finally got approval for a sale price of $123k!! (First negotiator said it was worth $180K!!!- Surprise)!

We closed the deal in April, 2010 and both the Seller and Buyer were ecstatic! All was right with the world!

Fast forward to July 2011! Last week, we received a document from our Seller that he had received. Are you sitting down? It was a LAW SUIT on behalf of MERS and Fannie Mae (Plaintiffs) against the Seller and Buyer (Defendants) and a possible 23 other defendants, (Does) who are at this point unnamed!

The Law Suit maintains that: ------------"The Substitution of Trustee and Full Reconveyance on the County records which purports to reconvey MERS's interest in the property is a mistake and was not properly prepared or recorded by ReconTrust. An actual controversy has arisen and now exists between Plaintiffs and Defendants concerning their respective rights and duties in that Plaintiffs contend that the Substitution of Trustee and Full Reconveyance is a mistake and, therefore, of no force or effect which should be stricken from the public records and that Fannie Mae's Deed of Trust is valid and enforceable.!"

I thought that the movie Too Big To Fail was unbelievable but this is ABSOLUTELY INCREDIBLE!!! Here is MERS (those bastards who were identified on 60 minutes as putting phony signatures on thousands of mortgage documents) maintaining that Recon Trust (not a party to the suit) MADE A MISTAKE? They did not properly prepare or record the reconveyance of the loan!!!

To top it off, the scum sucking lawyers (and I apologize to any scum out there that may be offended by the comparison) have filed a LIS PENDENS on the property such that the new buyer could not sell the property if she wanted to!!!!!

This lawsuit FAILS to mention that monetary consideration of $123K was ACCEPTED by BofA for the purchase of the property!!

I have to stop because my blood pressure is getting dangerously high!!!!

Has anyone EVER seen this before!!! I suspect that Fannie and MERS are probably putting these lawsuits out en masse in the hope that- WHAT- they get the property BACK so they can sell it now for $89K?

ABSOLUTELY AMAZING!!!!


Personally, this is what I was waiting for.  It is commonly argued that the Servicer/Trust/Bank doesn't really own the note.  That some other entity MAY have a valid claim on the note and the correct party is not before the court.  If this was really the case, I often wondered WHY there were no cases where some bank came forward and sued because they were the real owner.  I guess it's starting now. 



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William A. Roper, Jr.
Without actually reading the pleadings, it SOUNDS as though Fannie has decided that there was some fraud in the short sale, possibly by the servicer.  OR, perhaps, we are now seeing some instance where there was some double pledging of the note, despite MERS' registry.

The latter might be most readily imagined in respect of the servicer claiming ot be the beneficial owner of a loan actually sold to Fannie.

Overall, it seems to me that one cannot readily ascertain precisely what this means without reading the pleadings.
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