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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Cindy
Can someone explain being owner and holder of the note and mortgage "by mense assignment?"

I have a MERS mortgage and my note has been part of the recent transfers with parent company servicing, effective July 1.

The latest notice of transfer says the servicer who sued is no longer the servicer. The initial petition claimed the plaintiff was the servicer for the owner or holder of the note. The servicer admitted in one of its answers that it did not have possession of the note at the commencement of the suit. Yet months later, it claims it is the owner or holder of the note and mortgage by mense assignment.

More concerning, my foreclosure file is missing at the county office. Supposedly checked out to the judge, but the judge says he doesn't have it. I suppose it would take little effort to rebuild the file, but I thought the file would have some kind of security to protect the integrity of the documents.




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Mesne Assignment - an assignment of rights that passes from a grantor through one or more intermediaries to a grantee. For example, if Abel leases a building to Baker, who assigns his lease to Larry, who in turn assigns his lease to Mary, the assignments made by Baker and Larry would be called mesne assignments.

If B is attempting to foreclose on you, most likely they do not have standing to do so as they are not the final assignee.
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Cindy
Thanks for your time in answering, Brindy.

I read the definition online, but I couldn't figure out whether it means the sevicer is claiming all of the hidden transactions in the securitization are legal and I would need to object and deny, or if mense assignment meant the servicer holds and owns the note because MERS assigned the mortgage to the servicer since the first petition was filed. Parsing words is a tool of the legal trade and this terminology showed up unexpectedly in the latest document filed. It was not stated that way in the first petition.

The definition you posted seems to mean the servicer claims Lenders A to B to C to D transactions make them owner and holder. Could this be a different legal approach for the foreclosure firm? Just sneak in a few words here and there and change the whole dynamic to the plaintiff's favor--if the defendant fails to deny or object. Maybe I am making much of nothing.

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The actual word is 'mesne'.  It is a very archaic word.  Can you post the exact verbiage in which it was used.

Often the term is used to mean 'mesne profits' which are profits derived from land while in wrongful possession, and may be claimed in damages for trespass, either in a separate action or joined with an action for the recovery of the land. The plaintiff must prove that he has re-entered into possession, his title during the period for which he claims, the fact that the defendant has been in possession during that period, and the amount of the mesne profits. The amount recovered as mesne profits need not be limited to the rental value of the land, but may include a sum to cover such items as deterioration or reasonable costs of getting possession.

Looking further though as to some of the original uses of the term, which is Roman and used mostly in English Law, you find this definition: Middle; intervening; as, a mesne lord, that is, a lord who holds land of a superior, but grants a part of it to another person, in which case he is a tenant to the superior, but lord or superior to the second grantee, and hence is called the mesne lord.

In UPROAR CO.v.NATIONAL BROADCASTING CO. et al., 8 F.Supp. 358 (1934) District Court, D. Massachusetts, there is a reference to mense assignment thusly: 

This suit was begun as an action at law. The plaintiff, in its declaration, alleged that by mesne assignment it had acquired of Ed Wynn, or his sole representative, the right to publish in pamphlet form the subject-matter of his broadcasts over the N. B. C. chain as a part of the advertising program sponsored by the defendant the Texas Company. It alleged: That it was essential that the right to sell, to distribute, and to advertise the publication be enjoyed simultaneously with the broadcasting of the program; that the defendants had conspired to prevent the plaintiff from advertising the publication over the broadcasting chains controlled by the defendant National Broadcasting Company, and had unlawfully interfered with and caused to be canceled contracts entered into with other broadcasting companies for advertising, by means of the radio, the publication; and that it was entitled to damages both at common law and under the anti-trust laws.

RANSBURG ELECTRO-COATING CORP., Plaintiff, v. FORD MOTOR COMPANY, 245 F.Supp. 308 (1965) United States District Court S. D. Indiana, Indianapolis Division, there is a reference as follows in a patent case:

The inventors were William A. Starkey and Edwin M. Ransburg who assigned their interests, by mesne assignments, to the plaintiff.

Virtually everything I have found so far refers to a mesne assignment as an intervening (middle or mean) assignment. Think of it this way.  You take out a loan.  The warehouse lender assigns the deed of trust (DOT) to A, who assigns it to B, who assigns it to C and it ends up with D.  The mense assignments are B and C, and seem to be close to the core of the foreclosure controversy, i.e., people with a 'mesne' assignment attempting to show standing.

I am not a lawyer and this is not legal advice but I would go so far as to venture a guess some legal jingo is going on and you have a party with a 'mesne' assignment attempting to gain standing where none exists.  Once you assign it away, it is gone for good.

Here is a California case that is a bit more on topic in the real estate meaning is mesne.

JOHN LOPEZ et al., Plaintiffs and Appellants, v. MILO V. PUZINA et al., Defendants and Respondents, 239 Cal.App.2d 708 (1966), California Court of Appeals. First Dist., Div. One.

At 710:  The subject note dated July 15, 1958 in the principal sum of $4,298.26, payable to the order of Anthony Joseph Caruso and Marie Doris Caruso, his wife, was executed by Robert W. Lesco and Willa Mae Lesco, his wife, and delivered to said payees. The note recited that it was secured by a deed of 710*710 trust. The Carusos subsequently assigned the note to the Puzinas without recourse by an assignment affixed to the note. Thereafter, on July 23, 1958, the Puzinas delivered the note to plaintiffs as part payment for a parcel of real property sold by plaintiffs to the Puzinas. No endorsement or assignment was endorsed upon or physically affixed to the note. At the time the note was delivered to plaintiffs the Puzinas executed an "Assignment of Deed of Trust," which recited that the Puzinas, as present beneficiaries of the deed of trust dated July 15, 1958, which was executed by the Lescos and given to secure the payment of a promissory note for the sum of $4,298.26, [fn. 2] by "mesne assignment" "have endorsed, assigned and transferred and do hereby assign, transfer and set over unto John Lopez and Emanuela Lopez, his wife, in joint tenancy the said Deed of Trust and all right title, and interest in and to the real property thereby conveyed, together with the promissory note therein mentioned and all monies due or that may hereafter become due thereunder. ..."

Interesting, what the parties were arguing about was whether or not an assignment, or mesne assignment can 'assign the note'.

Continuing with Lopez at 712:

The crucial question presented, accordingly, is whether a promissory note can be endorsed by an instrument which is separate from the note. The only California case discussing this question which has come to our attention is Hays v. Plummer, 126 Cal. 107 [58 P. 447, 77 Am.St.Rep. 153]. There the plaintiff, to whom the defendants' note had been transferred by a separate instrument which assigned the note and mortgage securing it, sought to recover against the defendants as the makers of the note. No endorsement was made on the note by the assignor. Defendants had defenses which were not good against an endorsee but which were good against an assignee. The Supreme Court, in holding that the transfer was that of an assignment and not an endorsement and that defendants could therefore assert their defenses, discussed the requirements for an endorsement as follows: "An instrument payable to a certain person or order can take its place in the hands of a subsequent holder with the peculiar qualities and incidents of negotiable paper only where it has been regularly indorsed; and such indorsement can be made only by the writing of the indorser's name on the back of the instrument, if there be room to do so, and, if not, then on paper so attached to it as in effect to become part of it--called sometimes an allonge. Whether or not a name written on the face of the note might not in some instances be an indorsement need not be discussed; at all events, the name must be so written as to become, in effect, a part of the instrument. This is not only the rule under the general authorities, but it is so declared by our code. (Civ. Code, 3110.) In the case at bar, there was merely an assignment 712*712 of the mortgage and note made on a separate writing, without indorsement on the note."

The Court, in Lopez made it clear that an assignment is not an allonge to a note.

You are write to raise an eyebrow on the use of an archaic term such as a mesne note in your case.  Please share with the forum, if you can, exactly how the term was used.




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Jay_Son
Cindy,

What state do you live in?

In general, the servicer has the authority to foreclose as the agent of the owner of the note.  They still have to prove, however, the agency relationship to the principal and that the principal is the "person entitled to enforce the note."  Given how sloppy foreclosing attorneys are, this is where an effective defense comes in.
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Bill
http://www.ourlemon.com/docs/MERS/MERS%20Oklahoma.pdf

Here is an Oklahoma case where they use a Mesne Assignment claiming to be the owner/holder of the note. 

I think the important thing to take away from this is that the same defenses apply no matter what you call the assignment. 

1 The note needs to be endorsed and delivered to be the holder. 

2The assignment of the mortgage itself doesn't matter. 

3There is no Assignment of the Note, it has to be negotiated.
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Cindy
You're right, I made a typo in the word mesne. Glad you saw past that. This is very helpful information. I learned a long time ago, in the loan mod process, that my servicer is well trained to lie and deceive.

The exact wording of the complaint: "The plaintiff is the present holder of said note and mortgage having received due assignment through mesne assignments of record. A copy of the said assignment is hereto attached, marked Exhibit "C" and incorporated herein by reference."

Exhibit "C" is the MERS assignment to the plaintiff, signed by the plaintiff's law firm attorney.


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Jay_Son
Bill,

You are correct in the sense that that is the way most notes are transferred/negotiated.  However, the UCC also allows a note to be transferred (as opposed to negotiated).  Also, in some states like MA and PA (title theory states), an assignment of mortgage is also required to foreclose, so the AoM can also be important.

The following is my product, but you must know that: I am not an attorney and this is not legal advice - talk to an attorney.

To possess the authority to enforce a note, a person must demonstrate that it is the “person entitled to enforce a note.” Uniform Commercial Code (“UCC”) § 3-301.  Obtaining “person entitled to enforce” status under UCC § 3-301 requires being (i) a “holder” of the note; (ii) a non-holder in possession who has the rights of a holder; or (iii) a person not in possession who is entitled to enforce, and pursuant to UCC § 3-309, at one time had been in possession, but cannot now reasonably obtain possession. 

A “holder” is a person in possession of a note that is either made payable to that person, or made payable to the bearer of the note.  UCC § 1-201(b)(21)(A).  A “non-holder in possession” is a person in possession of the note by transfer,[1] rather than negotiation. 

The main difference between a “negotiation” and a “transfer” under Article 3 is whether the note was endorsed.  If the note is properly endorsed by the assignor, it’s a negotiation, and the assignee is deemed a “holder” once the assignee obtains possession of the note.  UCC § 3-201.  If it is not endorsed, all rights in the note can still be assigned, including the right to enforce, but the assignee must prove the purpose of the delivery in order to obtain “person entitled to enforce” status.  UCC 3-203(b).  Thus, a “non-holder” can acquire “person entitled to enforce” status only after demonstrating a “…voluntary transfer of possession.”  UCC § 1-201(b)(15). 

               Therefore, to be a "person entitle to enforce" by transfer requires that the assignor have rights in the note; that value be given; and that either the assignor execute a note-sale agreement or the assignee take possession of the note pursuant to a note-sale agreement.  UCC § 9-203(b)(1-3) (the same rules apply to transactions where rights to payment are sold and transactions in which a payment right is secured by collateral).


[1] Or as a successor in interest, e.g., subrogee, administrator of a decedent’s estate, etc.

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Cindy
Thanks, Jay_Son.

In my case, the plaintiff admits in the pending foreclosure documents that it does not have possession of the original note. Since that fact was openly admitted, I suppose that means it is unimportant whether the plaintiff has physical possession of the original note at the time of filing.

I was also notified, months after the case began, that the plaintiff is no longer the servicer; and the same notice named a trust as the owner of the note. But in the petition, after admitting earlier that it does not have possession of the original note, the plaintiff claims to be "the holder of the mortgage and note by mesne assignments of record." The trust is not mentioned in any recorded document. I thought providing loan servicing gave the servicer the right to foreclose for the owner or holder of the note.  But if the plaintiff is not the servicer now, how can it continue the case, running up legal bills along the way?

The only assignments recorded are the original mortgage and the MERS assignment to the plaintiff. The MERS AOM was recorded one day after the petition was filed, but was executed three days before. No matter, I guess, according to the White case, the MERS AOM was moot because the original mortgage traveled with the note and became part of the note's negotiability.



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