WHITE PAPER | LOSING THE PAPER – MORTGAGE ASSIGNMENTS, NOTE TRANSFERS AND CONSUMER PROTECTION

LOSING THE PAPER – MORTGAGE ASSIGNMENTS, NOTE TRANSFERS AND CONSUMER PROTECTION

Abstract

In this article, I survey the state of the mortgage loan transfer system, the legal rules that govern it, and the widening gap between those rules and the practices in the secondary mortgage market just prior to the 2008 crisis. The review includes some empirical assessment of the extent of errors and execution problems; the damage done by “robo-signing;” the Mortgage Electronic Registration System (“MERS”) and note delivery practices; and the extent to which courts will prevent or reverse foreclosure sales based on those errors and problems. I then examine why existing legal structures, for both paper-based and electronic transfers, are not working, and the extent to which they have failed, I also identify the key consumer and investor protection values and interests (finality, transparency, fraud protection, and so forth) that must be addressed by the law governing secondary market transfers of home loans. I conclude by outlining options for reforming the mortgage loan transfer system, including the use of a single document merging the note and mortgage, and a structure for the registration of a single authoritative electronic version of the mortgage/note and of all changes in parties to, and terms of, the transaction.

Full paper below…

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4closureFraud.org

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LOSING THE PAPER – MORTGAGE ASSIGNMENTS, NOTE TRANSFERS AND CONSUMER PROTECTION

Comments
6 Responses to “WHITE PAPER | LOSING THE PAPER – MORTGAGE ASSIGNMENTS, NOTE TRANSFERS AND CONSUMER PROTECTION”
  1. Peter J. Pike, Esq. says:

    The author’s conclusion: “The first and most obvious step in moving to a reliable and authoritative electronic system protecting lenders, borrowers, assignees and other parties to property title is to combine the note and mortgage into a single instrument, with the full image of the instrument and all later modifications to its parties and terms updated in a single electronic registry” fails to take into account basic real estate law. For example, in the state of Florida (where I practice), homestead law requires both spouses to execute a mortgage, in order for a lender to obtain a viable lien on the property. However, there are many instances where only one spouse is to be liable on the actual debt. By combining the note and mortgage into one instrument, the ability to separate ownership from obligation is lost.
    Another issue with the author’s thesis, to attempt to allow for electronic documentation, fails to address the idea that a Note is a negotiable instrument. In effect, the original Note is like cash. While we can make cash “electronic”, via use of debit and credit cards, the same cannot be said for a Note. The Note itself is like a $100.00 bill. You cannot photocopy that bill and claim that you have the right to spend it. It is only when notes become fungible (one note being exactly the same as another, which is the case with cash), that you can provide “paperless” notes. I do not believe that there is a solution at this time to this problem.

  2. Hell NO! No More Bankster Bailouts! says:

    The article totally skips over addressing what is transpiring with mortgages that were originated naming a ‘strawman’ CORPORATION that did not exist. I am referring to the practice of intentionally naming a non-existent CORPORATION as the ‘LENDER” on all the mortgage documents.

    Such deeds have no valid relationship with MERS even though MERS was typically named as the nominal Beneficiary and Nominee. But a nominee is usually defined as an ‘agent’ for the LENDER. Where the named LENDER did not actually exist, there can’t be any AGENT. Also, the MERS corporate resolution for these dealings will not actually name the ‘LENDER’ named on the deeds/notes, meaning that there is no authority for ANYONE to sign using MERS to do ANYTHING with such deeds/notes.

    I wish that more people were really examining the status of the original lender named on the mortgage. Also, some mortgages have followed a path that put them into the supposed ‘ownership’ by companies such as ‘SAND CANYON” at a time that the president of Sand Canyon has testified that Sand Canyon did not own any mortgages.

    Lots of mortgages were written naming “America’s Wholesale Lender Corporation” when it did not exist. Countrywide was the supposed SERVICER as a rule. Nothing showed Countrywide as being more than the servicer. Yet these mortgages usually have Countrywide slamming them into MERS. Later, another group formed that AWL Corporation. Countrywide tries to use the D/B/A it had as “America’s Wholesale Lender”. That is NOT the same thing as the “America’s Wholesale Lender Corporation” that is SHOWN on the documents, including origination documents. Judges that have REALLY LOOKED can not see any place that a relationship to Countrywide is shown on the DOT or Note. Also, if you have one of these loans, look at the part of CW with the MERS membership. Compare that to the part of CW that registered the D/B/As. Also look at the PSAs if your loan was securitized. They need two additional transfers prior to that.

  3. Ray says:

    Why don’t home owners and their lawyers fabricate documents and present them to the court. Who’s side is justice on then? Wanna bet the judge has the homeowner and his attorney arrested??

  4. Pamela Edwards says:

    I agree this should be in the media full tilt.

  5. To Tell The Truth says:

    Thank you, awesome…this should be sent to all courts…

    • Bobbi Swann says:

      (To TTTT) NO, it shouldn’t! Each state has it’s own rules, laws and regulations regarding land titles and foreclosure processes. Just like Hell No & Peter Pike have posted, for in Florida this would not work at all!!! I don’t know where or what state you are in, but this whole scenario is just plain WRONG and it seems to me that it would be in direct violation of our US Constitution. Who are these people that wrote this paper????????????

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