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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tmc
Lender A goes out of business.  MERS is the beneficiary on the DOT for lender A.  Lender A's assets are divided between two entities; FDIC and Lender B.   Which successor will MERS be the beneficiary, as nominee, of the DOT?  Is the DOT split between the successors?
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texas
Speculation, I would say the one that timely filed an assignment of DOT lien rights would hold priority, in a race state. If neither subsequent FDIC or subsequent Lender B  filed of record, good question. No proof the Note was every lawfully negotiated to either one as being the secured party.

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Moose
tmc wrote:
Lender A goes out of business.  MERS is the beneficiary on the DOT for lender A.  Lender A's assets are divided between two entities; FDIC and Lender B.   Which successor will MERS be the beneficiary, as nominee, of the DOT?  Is the DOT split between the successors?


"Goes out of business" is problematic. In almost every case I'm aware of, a sale to another entity or a bankruptcy is involved. In either case, how assets are distributed is contractually specified or adjudicate by a court ruling.

The devil is in the details of each.

Moose

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JamesF
What about the off chance that the company just went under? No buyouts, no takeovers, no sales, no bankruptcy...just gone.
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t

Quote:
Lender A goes out of business. MERS is the beneficiary on the DOT for lender A. Lender A's assets are divided between two entities; FDIC and Lender B. Which successor will MERS be the beneficiary, as nominee, of the DOT? Is the DOT split between the successors?

 

It is axiomatic that the equitable right to the mortgage or deed of trust follows the note without any express assignment.

 

The legal title to the mortgage or deed of trust remains vested in the entity that is specified in the instrument as the grantee and/or a subsequent grantee under a valid written assignment consistent with the statute of frauds.

 

As Moose points out, it would be rare for an entity to cease to exist as a corporation while still validly owning or holding notes.  These will have been sold and negotiated.  It is possible that there was a failure to execute a valid written assignment of the legal title to the mortgage or deed of trust.

 

What becomes of the legal title would depend somewhat upon the corporation laws of the state of domicile of the extinct corporation and the precise level of corporate decay or extinction.  It might also depend upon the escheat laws of the state where the property is situated.

 

Extinction of the corporation would essentially never result in a voiding of the legal title to the mortgage or deed of trust.  This is simply a myth propagated by the debt elimination scam swindlers.  It sounds plausible and forms the basis for one of many scams.

 

The owner of the equitable title to the mortgage or deed of trust could almost always seek the equitable reformation of the mortgage or deed of trust or otherwise add a count or cause of action to establish its legal ownership of the mortgage or deed of trust.  In a non-judicial foreclosure state, this might require affirmative court action rather than simply relying upon the private right of sale.

 

*

 

You are generally thinking about the problem incorrectly.  Suppose that A sells B his vintage 1970 Ford Mustang, but B neglects to execute a transfer of title.  B pays A.  A delivers the Mustang to B.  A gives B a bill of sale memorializing the transaction.  But A neglects to give B his endorsed title to the vehicle.

 

Who owns the Mustang?

 

Further suppose that A is beheaded by terrorists and is unable to correct this defect.  Or perhaps A is abducted by revolutionaries and cannot be found.

 

How can B get a valid title to the vehicle?

 

The answer would typically be found in the statutes of a particular state relating to vehicle titles.  In most places, at least for older vehicles, A might simply be able to present the bill of sale.  The circumstance of a lost title is so common that the state usually provides an abbreviated administrative remedy for the more common sorts of situations.

 

But under such circumstances where there wasn't a clear mechanism, in most places B might bring some sort of legal action in a court with equitable jurisdiction naming either the person (or entity) shown to be the owner of legal title or that persons' executors, administrators, assigns or heirs.  These might be individually named and served or more generally named and served by publication (e.g. "The unknown heirs of A", etc.).

 

B could ask the court for a judicial declaration and order establishing B's ownership and legal title to the vehicle.  B already has possession of the vehicle.  B paid for the vehicle.  B has a bill of sale memorializing the transaction.

 

B pretty clearly has some substantial rights in the vehicle and it seems unlikely that anyone will appear, intervene and oppose the suit.  B gets a judicial order and now B has legal title to the vehicle, as well.  This might prove mildly problematic is A is dead at the date of the order, while naming only A rather than A's heirs, etc. (possibly rendering the order VOID).

 

But if B gets his written title, someone is going to need to probably bring another action to establish some superior title or ownership.

 

*

 

Overall, you need to disabuse yourself of any illusion that you have stumbled across some arcane or unusual situation not previously addressed or well understood under the law.

 

You seem not to be the bountiful winner of some largess by virtue of some accident by the Lender any more than you are the winner of some foreign lottery or a candidate to pose as the beneficiary of a dead foreign potentate.  Rather, you seem to be the target of a debt elimination scam artist who has persuaded you -- either directly or indirectly through re-posts of legally questionable material -- that you can get a "free house" by following some formula set out by the scam artist. 

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t

If you have a particularly unusual set of facts or situation, try e-mailing Mr. Roper directly.  He has been exceptionally generous with his time in assisting Forum participants, even since he has ceased to post here.

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texas
A Mortgage and a Deed of Trust are not the same, I would check the laws that apply to each.
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texas
I would verify that a Mortgage follows the Note and then maybe consider that a Deed of Trust (lien) follows a Secured Party.
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t

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A Mortgage and a Deed of Trust are not the same, I would check the laws that apply to each.
 

Texas is certainly correct that mortgages and deeds of trust are distinguishable and also absolutely correct that any borrower needs to look to the unique laws of his or her state as to the requisites of a valid deed, mortgage or deed of trust.

 

Most often the requisites of validity of each is set forth within the state's statute of frauds.

 

The requisites for recording are separately set forth within the recording acts.

 

Recording does not usually make an instrument valid.  For example, the act of recording cannot possibly give effect to a bald forgery.  In most places, the forgery would be a legal nullity.

 

Recording merely helps to establish the priority of the instrument if it is valid.

 

There are often some interesting nuggets to be garnered from a reading of the precise provisions of a state's statutes.  For example, perhaps Texas should take a look and give us an exposition upon §5.021 of the Texas Property Code and §192.007 of the Texas Local Government Code!

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texas
ourlemon.com/docs/NSHAN%20FA%20Author%20Approved.pdf make already explain.
Above was written several years ago, based pretty well on Texas Law.

Additional writings are also at http://www.scribd.com/alviec or a faster site http://www.ourlemon.com, tried to be generic for all the states.

Make sure you return to MSFraud.org.

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JamesF
Can no one answer my question on this topic? or maybe have a case dealing with it?
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texas
JamesF said: "What about the off chance that the company just went under? No buyouts, no takeovers, no sales, no bankruptcy...just gone."

and: "
Can no one answer my question on this topic? or maybe have a case dealing with it?"

I just don't see a precise question, at best I see a speculative request for a speculative scenario.


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    It seems to me the real issue is whether or not the Note, showing the
obligation, was lawfully transferred before the entity went out of business.
    It also depends upon whether or not the Note was a "negotiable instrument" or a "non negotiable instrument". If it was the former, than
whoever ends up with it, even a thief, might have standing to enforce it.
    On the other hand, if the Note was "non negotiable" and part of a larger "purchase money mortgage contract" which included the DOT or mortgage, and it was never lawfully transferred to any third party, than the maker might have won the proverbial "death gamble" (mort-gage) and might be able to own the property "free and clear".
    One would have to do a "quiet title" to clear the title. In my opinion,
the best place to file it would be US Federal Court, but you'd need a lawyer
certified in Federal Court to do it right and win your case.
    I've been involved in such a case since last May, and so far, two entities
are claiming to own the Note sold by the "dead lender" which never assigned
the mortgage before going out of business. Paragraph 20 of this mortgage
states that the originator had the right to sell the Note multiple times with
out informing the borrower. (This paragraph 20 exists in many adjustable
rate mortgages that I have examined.) It is the key to understanding the
Ponzi scheme many of the originators were running in order to defraud the
investors by selling the same note multiple times. It also explains why the
mortgage/DOT was never assigned and why MERS was used as a "straw
man" to hold the mortgage/DOT and hide the fact that the Note had been sold multiple times.
     Very often, the originator itself was not the real lender, but rather a
"bankruptcy remote straw man", used so that when the investors realized
they were defrauded, there would be no one to sue, since the originator
no longer existed.
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texas
MikeH, inaccurate assumptions.
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Clyde

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It seems to me the real issue is whether or not the Note, showing the
obligation, was lawfully transferred before the entity went out of business.

 

This guy Mike is a complete idiot.  It doesn't matter.  Corporation laws specify what happens to the assets of a defunct corporation.  They are not simply extinguished.  This guy has no idea what he is talking about.

 

Quote:
It also depends upon whether or not the Note was a "negotiable instrument" or a "non negotiable instrument". If it was the former, than
whoever ends up with it, even a thief, might have standing to enforce it.
On the other hand, if the Note was "non negotiable" and part of a larger "purchase money mortgage contract" which included the DOT or mortgage, and it was never lawfully transferred to any third party, than the maker might have won the proverbial "death gamble" (mort-gage) and might be able to own the property "free and clear".

 

This is also ridiculous.  Mike seems to just make this stuff up.  There is no law anywhere in the U.S (nor as far as I know anywhere in the world) that provides for the extinguishment of a non-negotiable instrument upon either the death or dissolution or the owner or the holder.

 

This is completely specious and anything posted by this idiot should be disregarded.

 

Quote:
I've been involved in such a case since last May, and so far, two entities
are claiming to own the Note sold by the "dead lender" which never assigned
the mortgage before going out of business. Paragraph 20 of this mortgage
states that the originator had the right to sell the Note multiple times with
out informing the borrower. (This paragraph 20 exists in many adjustable
rate mortgages that I have examined.) It is the key to understanding the
Ponzi scheme many of the originators were running in order to defraud the
investors by selling the same note multiple times. It also explains why the
mortgage/DOT was never assigned and why MERS was used as a "straw
man" to hold the mortgage/DOT and hide the fact that the Note had been sold multiple times.

 

Once again, this idiot Mike seeks to confuse, distort and mislead distressed borrowers about the meaning and terms of ordinary language of the mortgage.  What is permitted and described is one or more serial sales of the note and mortgage and that is all that ever happens.

 

I understand from other posts that Mike is a swindler who operates a debt elimination scam out of Tampa, Florida.

 

Quote:
Very often, the originator itself was not the real lender, but rather a
"bankruptcy remote straw man", used so that when the investors realized
they were defrauded, there would be no one to sue, since the originator
no longer existed.
 

 

The originator named on the note and mortgage instrument is always the real lender.  The real lender may and usually does fund the loan through borrowed funds.  This is not only common, but customary and does not alter the identity of the real lender.

 

Mike posts here as a troll hoping to find new victims for his scams.  If he contacts you, please alert law enforcement authorities!

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new york state requires that whoever is assigned(successor by successor) the mortgage through a sale file the assignment with the respective county clerk's office. if they do not file the assignment then it would seem they have an unsecured note in their possession. even more proof is if they did some assignments as part of the trust and not all..worth investigating thats for sure!

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T

Quote:

Quote:
It seems to me the real issue is whether or not the Note, showing the
obligation, was lawfully transferred before the entity went out of business.

This guy Mike is a complete idiot. It doesn't matter. Corporation laws specify what happens to the assets of a defunct corporation. They are not simply extinguished. This guy has no idea what he is talking about.

Quote:
It also depends upon whether or not the Note was a "negotiable instrument" or a "non negotiable instrument". If it was the former, than
whoever ends up with it, even a thief, might have standing to enforce it.
On the other hand, if the Note was "non negotiable" and part of a larger "purchase money mortgage contract" which included the DOT or mortgage, and it was never lawfully transferred to any third party, than the maker might have won the proverbial "death gamble" (mort-gage) and might be able to own the property "free and clear".

This is also ridiculous. Mike seems to just make this stuff up. There is no law anywhere in the U.S (nor as far as I know anywhere in the world) that provides for the extinguishment of a non-negotiable instrument upon either the death or dissolution or the owner or the holder.

This is completely specious and anything posted by this idiot should be disregarded.

Quote:
I've been involved in such a case since last May, and so far, two entities
are claiming to own the Note sold by the "dead lender" which never assigned
the mortgage before going out of business. Paragraph 20 of this mortgage
states that the originator had the right to sell the Note multiple times with
out informing the borrower. (This paragraph 20 exists in many adjustable
rate mortgages that I have examined.) It is the key to understanding the
Ponzi scheme many of the originators were running in order to defraud the
investors by selling the same note multiple times. It also explains why the
mortgage/DOT was never assigned and why MERS was used as a "straw
man" to hold the mortgage/DOT and hide the fact that the Note had been sold multiple times.

Once again, this idiot Mike seeks to confuse, distort and mislead distressed borrowers about the meaning and terms of ordinary language of the mortgage. What is permitted and described is one or more serial sales of the note and mortgage and that is all that ever happens.

I understand from other posts that Mike is a swindler who operates a debt elimination scam out of Tampa, Florida.

Quote:
Very often, the originator itself was not the real lender, but rather a
"bankruptcy remote straw man", used so that when the investors realized
they were defrauded, there would be no one to sue, since the originator
no longer existed.

 

The originator named on the note and mortgage instrument is always the real lender. The real lender may and usually does fund the loan through borrowed funds. This is not only common, but customary and does not alter the identity of the real lender.

Mike posts here as a troll hoping to find new victims for his scams. If he contacts you, please alert law enforcement authorities!

 

 

Excellent Post, Clyde!  Thank you!!

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t

Quote:
new york state requires that whoever is assigned(successor by successor) the mortgage through a sale file the assignment with the respective county clerk's office. if they do not file the assignment then it would seem they have an unsecured note in their possession. even more proof is if they did some assignments as part of the trust and not all..worth investigating thats for sure!

 

This does not seem to be a correct articulation of New York law on foreclosure.

 

I would encourage those in New York to read Mr. Roper's thoughtful posts on New York foreclosure cases.  Angelo is also now fairly well informed on this topic.

 

See also the recent 2nd Department decision in Deutsche Bank Trust Co. Ams. v Codio, 2012 NY Slip Op 03131, handed down on Tuesday:

 

http://www.nycourts.gov/reporter/3dseries/2012/2012_03131.htm

 

Perhaps Angelo will comment.

 

 

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   Where Codio made his mistake was in conceding that the note was a negotiable instrument. He should have challenged that assumption at the
very beginning and the outcome might have been different.
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t

Quote:
Where Codio made his mistake was in conceding that the note was a negotiable instrument. He should have challenged that assumption at the
very beginning and the outcome might have been different.
 

More useless garbage from uber swindler Mike H., who knows little about the law or foreclosure, but nevertheless holds himself out as an expert to swindle distressed borrowers out of their last $$$. 

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