The Sidebar | What is an Assignment of Mortgage

  • 0
  • May 15, 2008

Real Estate Radio USA

What is an Assignment of Mortgage and Why Is It Important In a Foreclosure Action?

UPDATE: If you are new to this article be sure to read and scroll all the way down. The meat of this article is in the tremendous information profided in the comments by mortgage professionals and attorneys.

Foreclosure is the process by which a financial institution (e.g., your bank/loan servicer) can reclaim your home and/or land if you fail to make timely mortgage payments.

In a foreclosure action, the bank files a complaint with the state court to foreclosure the property. Oftentimes, banks do not have the right to bring such action due to lack of an assignment of mortgage.

An assignment of mortgage is a written document which serves as proof of transfer of a loan obligation from the original borrower to a third party.

First and foremost, it is important for you to understand the legalities of foreclosure and your rights for mortgage foreclosure solutions. There are two basic documents involved in a bank loan transaction, the promissory note and the mortgage. The note is a contract that details the terms of a promise by you to pay a sum of money to the bank.

The terms of a note typically include the principal amount, the interest rate if any, and the maturity date. It also may contain provisions concerning the bank’s rights in the event of default, which may include foreclosure of your property.

The mortgage is a method of using property, real or personal, as security for the performance of an obligation, usually the payment of a debt. It gives the bank the right to take away your property if you do not pay as it is specified in the note. Essentially, the mortgage is what gives the bank the right to foreclose.

The note, by itself, is considered to be an unsecured debt. On the other hand, the note accompanied with the mortgage comprises a secured debt. The difference between these two is that a secured debt allows the bank to force sale of the property, which in turn permits satisfaction of the loan in case of default by you, the borrower. However, without the mortgage, banks cannot force sale of the property to satisfy the debt.

In many cases, when a bank lends you money to purchase a home, it will subsequently sell the note along with the mortgage to investors in the secondary market. The secondary market manages mortgages that were originated in the primary market. It consists of investors, both public and private, who buy the mortgage notes.

This allows the mortgage lenders to replenish the cash reserves, so that they can originate more mortgages to more consumers. In this way, the investors profit from the interests that the mortgages charge.

Furthermore, it should be noted that when a loan is sold in the secondary market, the bank is no longer the owner of the note and mortgage. However, the bank’s rights under the mortgage are not automatically assigned to the investors. In order to assign such rights, an assignment of mortgage is necessary.

Generally, a title search of the property is conducted to determine whether an assignment of mortgage has been recorded. If an assignment does exist, then a defense is available to delay your case and/or prevent foreclosure of your property.

Once your situation is completely assessed, a mortgage foreclosure solution can be recommended. We are here to work on your behalf to come up with the best course of action to prevent foreclosure. Our team of attorneys specializes in helping clients who have fallen behind on their mortgages payments and who wish to avoid foreclosure.

Erik Wesoloski, Esq.
Wesoloski Carlson, P.A.
777 Brickell Avenue, Suite 710
Miami, Florida 33131
erik@wesoloskicarlson.com
http://www.wesoloskicarlson.com/
Tel 305-329-1020
Fax 305-532-7804

The article is not intended to be legal advice. If you are faced with a foreclosure action please consult with an experienced real estate litigation attorney. Wesoloski Carlson, P.A. is a law firm based in Miami, Florida and its attorneys are licensed in the State of Florida.

Who Owns Your Mortgage? “Produce The Note” Movement Helps Stall … Sep 22, 2009 Modern-day home mortgages have been so sliced and diced by rapacious financiers that some homeowners are successfully delaying — or even

Mortgage Nightmare: Who Owns My Loan? – ABC News May 27, 2009 Countless mortgages once serviced by one company are now handled by another. The only notice that homeowners get is a new name or address on

Answer Desk: Who owns my mortgage? – Answer Desk- msnbc.com Jun 30, 2008 But that means figuring out who owns your mortgage — which is not as easy as it looks Don’t I have a right to know who owns my mortgage?  

Realty Times – Who Owns My Mortgage? Apr 27, 2009 Real Estate News And Advice – Who Owns My Mortgage?

 


About Barry Cunningham

Remember us? was one of the co-hosts of the long-running, truly goundbreaking, and arguably the #1 online radio show about real estate investing. Real Estate Radio USA was on the air 5 times per week before podcasting became cool. But now, we're back as a full multi-media operation and we're aggressively buying houses again! We're back baby!

124 Comments

  • Kathryn says:

    I have a weird situation.

    I’ve been working with lender for a year to get loan modification because I’m upside down on my house by about $1.0 million. I’m in a community that has experienced almost 400% sales decline. Really high foreclosure rate and now banks fire selling at pennies on the dollar causing further declines. There are RICO lawsuits against the banks that made the mortgages in our neighborhood.

    First I got denied because the bank made calculation mistakes in my debt but calculated my income using tax return. Now they’re denying me because they’re calculating my income based on 3 months P & L, excluding tax liability, and won’t use my tax return even though I’m in a seasonal business. They’re changing the calculation rules to deny me. This has been going on for a year.

    Just recently found out my loan had been assigned to another bank (investor) last year. My bank (servicing agent) that is denying me says they’re doing it based on investor guidelines. Contacted the investor and they don’t know a thing about my attempts or my denials.

    The investor bought the assignment based on an inflated appraisal ($1.5 million inflated over value at the time of the appraisal). I’m sure the investor is going to fight the assignment so I’m back in limbo.

    It seems like there are a ton of wrongs. The assignment was based on a fraudulent appraisal, my denials are based on errors that can’t get corrected and/or income calculations that wouldn’t be used for a standard loan but disqualify me for a modification. I have no recourse other than to stop paying. The servicing agent is intentionally denying me to leave the investor in the dark. The investor is now aware but going to fight the assignment. If they win, I’m back to the original bank who is already in trouble for inflated appraisals and continues to calculate my income/debt wrong. I’ve talked to a couple of attorneys but haven’t found one that says yes – bad things happened and you have recourse.

    I didn’t want to foreclose. We worked hard to build this house. We didn’t cause this mess, the banks that sold to investors did. It seems ridiculous that someone else will buy it for pennies on the dollar and benefit from our hard work.

    Any thoughts?

  • P.R. Bradley says:

    John, I Too, with profuse thanks for all your info. & support. We (retired Mom and disabled Son are Pro Se Litigant in Idaho where protection for the consumer is all but non-existent. With the exception of Chief BK Judge Terry Myers who ruled in the Sheridan BK 7 case, in which he, with brilliant logic ruled that MERS had no standing to act as movant to request lift of the stay in the Sheridan’s BK 7.
    He also argued that MERS has little to no standing in any activity regarding mortgages.

    My initial question involves motioning for ‘Quiet Title’. Both my son and I have completed BK 7s in 2008 & 2009 (the idea was to minimize debt to qualify for SPS, aka, Select Portfolio Servicing’s required figure for modification, which, of course, was never approved) .
    At the time of the BK 7 proceedings Select Portfolio Servicing, SPS, acted as movant and secured creditor, which they were not and perpetrated fraud on the Court to lift the stays in both BKs. SPS is Credit Suisse’s Master Servicer & front entity for all their PSAs (Securitizations Pkgs.)
    At the time, we had no clue about any of this mess ( Lack of Standing, Predatory loans, Securitizations or possibility of Rescission ) and within this time frame the BK Trustee simply saw that SPS was on the MERS data base as a Servicer/ Creditor so allowed the Relief to be granted during both BK proceedings.

    We are now, as of May 2009, Plaintiffs, Pro Se, in a TILA – Fraud-Fair Debt and Collections Practices Complaint and we also appropriately Recinded, based upon TILA Violations, within the 3 year alloted period ( SPS did counter with a letter indicating that since the debt/Note was discharged in the BKs we had no Note to recind, though it is our understanding that our act of rescission covers their lien right as well – correct yes? ) At this juncture we have stopped all ( three attempts) foreclosure sales (Idaho is a non- Judicial State.

    Defendants are Select Portfolio Servicing, present servicer, MERS, the Loan Broker, original (bankrupted ) Lender Ownit & servicer Litton and the Law firm SPS originally employed to act as their Trustee for foreclosure.

    Defendants SPS, Litton and Mers have Motioned to Dismiss themselves based upon not being present or involed at the inception of the REFI in July 2006.

    We have countered with our Objection to their Motion to Dismiss based upon MERS involvement as Nominee from inception and current involvement as assignor in both ‘Corporate Assignment of Deed of Trust’ and Assignor as giving trusteeship to Just Law for foreclosure proceedings. And that SPS and Litton having Assignment liability & responsibility for Due Diligence in the incorporation of our PREDATORY loan into their PSA ( audit by “Loan Fraud Investigations” out of California, Pat Pulatie, CEO.

    Important notations:
    1. Original Lender Ownit bankrupted in january 2007, which we believe severed the Agency relationship with MERS as nominee.
    2. There is no filing nor indications that assignment from Ownit transpired to any other purported lender by MERS or any other means, indicating a broken ‘Chain of Title’ ; only that servicing was transferred, sold or assigned from Litton, October 2006, who was listed as servicer in the original refi docs, to servicer, Select Portfolio Servicing.
    3. the only county documents of record, ” Assignment of Deed of Trust’ by MERS as Assignor dated may 19, 2008 and filed the same say as our Default on May 27th 2008.
    4. The Corporate Assignment of Deed of Trust was from MERS, as Assignor to the Assignee: U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE, ON BEHALF OF THE HOLDERS OF THE CREDIT SUISSE FIRST bOSTON MORTGAGE SECURITIES CORP., HOME EQUITY PASS THROUGH CERTIFICATES, SERIES 2007-1.
    5. The above same PSA

  • P.R. Bradley says:

    John, sorry I guess I typed for too long and got cut off by the site.

    You probably get the gist…..
    I have submitted the required Objections to the defendants Motions to Dismiss. since we are Pro Se the Judge has assigned the case to be overseen by a Magistrate at Court. Any responses were supposed to be filed by February 25th, 2010 and there is nothing to date…(3 months and counting).no determination by the court for Dismissal, hearing, or Summary Judgement. Within my Objection to the Motions to Dismiss I requested that the Court MOTION the Defendants, Select Portfolio Servicing be “Compelled’ to bring forth the identity of the Holders in Due Course so that I could amend our complaint accordingly and include the Pretender Lender and make appropriate adjustments to the original complaint.

    This has not been addressed so I’m thinking that a Motion for ‘Quiet Title ‘ could be efffective in bringing this stressful ordeal to a head or maybe even successful in getting our Title cleared with damages for all we’ve lost. The added difficulty of not being able to find an attorney to trust with our home and future has been horrendous
    Thanks John If you cannot assist nor have the time to respond I certainly understand. At the least I have become more clear just by venting. Thank you so, so much.
    Pat

  • John says:

    Hi P.R. Bradley,

    Thanks for your information on your case. The courts do not get in a hurry to determine these things and I can only say that I have several cases that I am still after 6 months waiting for a judge to determine my clients faith based upon my audit.

    I did get a decision in two (2) weeks on our Objection to the Motion for Summary Judgment by a judge who got it right. Just hang in their.

    I would have to see all your documents to make a determination but the Quiet Title can only come after you win your case on the issues.

    Feel free to email me directly….

    Forensic Mortgage Auditing and Foreclosure Defense
    oliver@ipa.net
    john

  • John says:

    Hi Kathryn,

    I would have to look at your documents but I would suggest based upon your comments that you need to be a Plaintiff in a complaint and list all the players as defendants asking the court to grant you and injunction which includes the making of any payments and stopping any and all credit reporting to your credit.

    Get into discovery and find out who are all the players and start bringing them down one by one.

    Forensic Mortgage Audits and Foreclosure Defense
    oliver@ipa.net
    john

  • stevie rocker says:

    1) – to Mary LeDoux: check your state recording statutes. In Nevada, for instance
    NRS 111.315 says that an instrument affecting an interest in property – and this would include an assignment of a deed of trust – when not recorded is only binding on the parties thereto. No notice – not binding.
    2) Is someone saying here that default swaps are done, loans are written off, and then bogusly assigned to another entity for garnering the collateral? I must
    misunderstand, although it would not surprise me to learn that company A takes a tax write off and then company B gets the property, anyway. Where can I sign up for some of this?

  • elkate says:

    Have not posted here in quite awhile. To Stevie Rocker and point #2 – yes, this is what is being done. After write-offs, collection rights to loans are sold to distressed debt buyers/Hedge Funds at steep discounts. Thus, a windfall profit is realized when property is foreclosed.

    Servicer continues to service for the distressed debt buyer/Hedge Fund – but you are never told this. Servicers, trustees, and trusts are not the creditor – they cannot “account” for recovery on anything because they have no accounting balance sheet to do so.

    Accounting is the key.

    You want to sign up for “some of this” – invest in a Hedge Fund that participates in these egregious investments. But, Hedge Funds usually require a high minimum denomination – this is only for the wealthy. They do not want to legitimately modify the loans. A valid modification would require disclosure that they are the creditor – and in order to be really valid, would require a principal reduction. Greed lives on.

  • Laura says:

    Trying my best to make a long story as short as possible. This is in Colorado.

    Bought house in 1999. Refinanced in 2002, for $81,000 with mortgage broker company called Creative Mortgage Funding who assigned note, apparently before closing/settlement, to Ohio Savings which later on changed its name to Amtrust. Amtrust was shut down by the FDIC in December, 2009. The FDIC has sold the servicing of my (now non-performing) loan to Residential Credit Solutions (for 37% of face value!) effective August 1st, 2010.

    Checked records in the public trustees office. There are NO assignments recorded. Far as the public trustee is concerned, the note is still with Creative Mortgage.

    Copies provided to me at closing include a copy of the first assignment from Creative Mortgage to Amtrust (then called Ohio Savings) which is Notarized, but NOT SIGNED.

    I’m very behind on my mortgage, made only partial payments from December 2008 through February 2010, and no payments at all since February 2010. Thanks to the numerous machinations of Amtrust throughout the last two years, I now owe more ($88k) than I originally borrowed in 2002 ($81k)… much less what the house is worth (approx $55k). Have gone through nightmares of being jerked around attempting to modify the loan all throughout 2009… attempted to modify with the FDIC but got jerked around on that due to a miscoding of the status of my loan … now being advised by FDIC to wait till Residential Credit Services takes over servicing and pursue modification with them.

    Gah. Screw that. Anyways…. I question whether or not anything has proceeded properly for years. If the original assignment was never recorded, nor any subsequent assignments recorded, how can Residential Credit Solutions have any legal right to collect any payments from me, much less (eventually) foreclose on me? Residential Credit Solutions is the servicer… but who actually owns my loan now? Is it owned by the FDIC, who’s been acting as the “Receiver” since they shut down Amtrust back in December?

    Cause foreclosure is pretty much guaranteed. There is zero way for me to pay the arrears, much less current payments. Job situation has deteriorated to the point where even if I got lucky and the new servicer didn’t jerk me around for a modification, I can’t qualify for one anymore – during the last runaround with modification attempts before the FDIC closed down Amtrust, they said my then-$1220 a month in income wasn’t enough … now income is down to around $600 a month. (Yes, I’m continuously looking for work)

    I’m thinking of making a proactive move. I’m thinking that shortly after the assignment to Residential Credit Solutions goes into effect in August, of sending in a Qualified Written Request asking for copies of ALL original documents and ALL assignments. (I’ve no doubt most if not all won’t be able to be produced.) Wondering if they fail to respond, or provide requested documents, to pursue quiet title. Sue them in court to prove validity of debt, be the one doing the suing, put them in position as defendant. But honestly don’t know if this is even worth my time… maybe I should just wait till they actually file the foreclosure? Which will happen, eventually.

    Not afraid of proceeding pro se, since I can’t afford a lawyer and frankly, I’ve got nothing to lose but time and effort :)

    Suggestions, advice, direction to good sources of info, whatever assistance is much much welcomed…

  • Greg says:

    Wow there is a lot of stuff going on here. I found this link while searching for info on what happens when a deed of trust is voidable. I too am fighting with my servicer to get my loan modified and they have blown me off for 9 months for numerous lame reasons. I found some info about MERS and the CALIF tax and revenue code. Apparently if MERS is named as the beneficiary then the deed can be voided. That is the case with my deed. So, how do I pursue getting it voided and then what happens after it is voided? Should I void it? How can I do a title search on my own and find out where the original note is?
    Greg

  • Hi Greg…thanks for stopping by and thanks for your comment. I’m going to let John respond and hopefully he’ll get back to you shortly. If not I will email him. You are finding out how far the wormhole actually goes unfortunately.

  • Greg says:

    Hi Barry. Yes there is a plethora of info and blogs online. What a marvel. There are tons of people being foreclosed on and losing their homes due to unethical behavior and lack of buyer knowledge. Then there are those who are fighting and winning. I won’t go down without a fight, I just need the right ammo and a good attorney!

  • Michael says:

    Help, I’m in Pa and am going against Ocwen. I have an attorney that is not calling me back and has trained his paralegal to “counsel” me by saying it will be tooo costly to fight Ocwen and that I should do what they say. Help needed in Pa.

  • Hi Michael..are you paying this guy? And if so, you need to find another attorney. If you feel comfortable, please tell us more about your situation.

  • Greg says:

    Hi Barry et al. I just got an attorney that is part of an employer benefit package, so hardly costing me anything. But that being the case the office is a bit slow on working on my issues. I still want to be informed as possible on the sequence of events though. How to pursue voiding title. What that causes. How do I request the lender to produce the note if I have not been officially foreclosed on. Although they have sent me a letter denying my 9 months of loan mod struggles, and offering their assistance in my foreclosure. There does not seem to be a large number of real estate savvy law offices out there.

  • […] The Sidebar | What is an Assignment of Mortgage What is an Assignment of Mortgage and Why Is It Important In a Foreclosure Action? UPDATE: If you are new to this article be sure to read and scroll all the way down. The meat of this article is in the tremendous information profided in the comments by mortgage professionals and … […]

  • cynthia says:

    Greg..A Missouri appellate court, has given us a new tool in Bellistri v Ocwen get Pacer and get yourself knowledgeable about YOUR paperwork, there are so many attorneys that don’t know the nature of this fraud.
    Get a Black’s law dictionary and your deed of trust or mortgage depending on the the state you live and get familiar with every word in that document (seek and you shall find)… read over this entire post from the beginning as well.

  • Mike says:

    I am going through a foreclosure due to losing job after 16 years of employment. 1st mortgage with HSBC, they have been given the judgement to proceed with the sherrif sale. BUT HSBC is working with me on a short sale, they did approve a sale we had, but lost buyer because second would not go for it. We do have another offer in to HSBC, should be approved it was a little higher than the already approved offer. Problem: 2nd mortgage started with Irwin Union Equity corp. now out of business. Records show Irwin Union/MERS. The servicer or mortgage company has changed 4 times. Irwin-homecoming-GMAC-Green Tree Servicing, none of the assignments were ever recorded except for the original. GMAC transferred this to Green Tree in May 2010, while I was delinquent. In June Green Tree charged off the loan. We presented them with the short sale offer and the approval from HSBC, we were lied to and jerked around. I was told by a lady named Leann that she wouldn’t give me the other 5pcs of paper work that were mysteriously now missing unless I woulld give them at least $11000.00 for release only on 57k. I have sent them a VOD letter, I don’t think they have all the paper work to hold this up. Any suggestions on getting them to negotiate and let this go through. I will probably have to see what the response is to my VOD letter. Now the house is going to be up for a tax sale in October. We can’t get them to even give us a call back on the new offer. Any suggestions or help would be greatly appreciated.

  • cynthia says:

    It seems to me if it was charged off, the account with them is done. They actually lack standing to have a position. look into the foreclosure codes/statutes for your state usually(I could be wrong) if the first has started foreclosure the second goes away… I would do a qualified written request as well and make sure it goes to the registered agent for the company in your state.

  • Mike says:

    cynthia,
    I will look into that, thank you. Who do I send the QWR to? I’m not sure who the registered agent in my state is, where can I find this information? I did receive the notice of default judgement for the foreclosure on the first. No sale date has been set, partially because we have a short sale offer. I will have to see if the second has a right to their lein. I do know it has not been released as of this past Monday.

  • cynthia says:

    Your Secretary of State Office, where anyone doing business in one state but have corp office in another has to have license to do business in the state of business. The QWR would get sent to the lender..(Google)….Sounds like your done with the second.

  • Greg Galvin says:

    Well, I did a title search and there was nothing recorded in my County after the original refi in 2006, even though the loan was sold twice since then. The original deed states MERS as beneficiary. Calif is not a judicial state when it comes to foreclosures. Two attorneys have told me that I don’t have much recourse for getting into a court, either before or after the foreclosure has been filed. Whether there is a separated note and deed and the deed can be voided, or whether the note even exists is moot, unless it gets in front of a judge. That seems to be rare in CA. Any thoughts? Thanks!

  • Mary says:

    Dear Laura from (7/27):
    You have just written my letter! I was offered a 6 month “forebearance program” by “Amtrust” in October 2009 right before they folded to the FDIC in Dec 2009. When my forebearance period was up they (FDIC) would not take my regular payment, for May, June or July, which in my mind for the first time put m 90 days deliquent. I was also told to wait for the “transfer”. in August. They never said to whom. I then called RCS and was told again not to make payments while conducting a “loan modification” because the money owed could be added tothe loan amount, reduced or forgiven all together. Who wouldn’t wait. Plus, I went on line and the HAMP Program seemed to be the answer for the long run and federally Funded, I think or thought. In Septembe,r we were also denied and they suggested a short sale in lieu of foreclosure. We had never been behind and was told that the “forebearance” period was just being extended to us “to just help us get back on our feet during a difficult time”. Now we are most likely going to lose our home and probably have a serious “deficiency judgement” filed for the portion we are unable to pay with a sale and have 1099-MISC income to declare on nextyears tax return to boot.

    I did get in touch with my local House of Representative early July, who has turn forwarded my disertations to the Banking Commission because Amtrust was not State Regulated, they couldn’t do anything on the state level. I have also been told AMTRUST was a Fannie Mae or Freddie Mac service providers, they are an independent/private investors that can do pretty much whatever they want to.

    What is the next step? Did yo have a title search on your property to verify the assigments, or lack of assignments? Who can get a job when you need 4-5 hours a day to save your home from a “third party consortium of opportunists” stated in an article by Carrie Bay on July 21, 2010

    My next objectiv was somehow to go National, but time and money!

  • Please, I need your help in locating

    SCOTT SCHEINER Alledged robo signer for MERs, CitiBank, CItimortgage and others…………

    scott scheiner anybody????? Please help me with exhibits, Mtg’s assignments and others…………

    SCOTT SCHEINER MERS, CITI MORTGAGE

  • Carlos Mar says:

    Please feel free to email me at:

    CarlosMar67@aol.com

    I need information on a MR. SCOTT SCHEINER who has been signing assignments of mortgages and other real estate documents on behalf of mortgage electronics systems MERS, Mortgage, JP Morgan and CitiMortgage.
    Plus many other doc’s, I believe he is somewhere in Missouri.

    If you have any documents with his signature, please I beg you all to send them to me.

    Thank a million.

Interested In Selling Your House? We're Buying!