Posted on 05/25/2010 1:30:38 PM PDT by longtermmemmory
--SNIP--
Partly responsible: a new Florida Supreme Court rule that requires lenders to verify they are the actual owners of a home before making the initial case for foreclosure.
Show me the "note," in other words.
The problem is that the notes — legal promises from borrowers to repay a debt — have been sold and resold, bundled into securities, scanned into computers, sealed in unknown vaults and lost in other ways as homes got caught up in the puzzling markets of the real estate boom.
"The original note is something very significant, and they just seem to have lost thousands of them," said Boca Raton attorney Marlyn Wiener, who handles real estate cases. "Nobody knows where the stuff is."
The new rule was approved in February with the intention of unclogging the foreclosure courts, which have an estimated statewide backlog of 500,000 cases. It also gives judges power to sanction plaintiffs who make false accusations on the ownership of notes or missing notes.
"I believe it has affected the number of new filings," said Palm Beach County Circuit Judge Meenu Sasser, who handles the county's foreclosures. "It streamlines the process."
Law firms handling the foreclosure overload, sometimes called foreclosure mills, have routinely filed a "lost note" claim with the original default notice, regardless of whether they looked for the note, said Miami-Dade Circuit Judge Jennifer Bailey.
The legal move gives lenders a statutory out if the original note truly can't be located. When asked what efforts were made to find the note, however, such statements as "searched file cabinet" and "searched fire proof safe" have appeared on several court records.
"It was very confusing. How can you foreclose on the note if the note is lost?" Bailey said.
(Excerpt) Read more at sun-sentinel.com ...
As the article indicates some cases have two banks forclosing on the same property.
it is not enough the bank lawfully bought it. The note has to be lawfully bought each step of the way AND they have to show there was not a government action in between.
the last line of the article states, “”There’s some weird stuff going on,” she said.”
forclosure mills are cranking the billable hours and the banks are not watching the lawyers.
I can’t see how/why in this age where most documents are digitized, why the banks don’t have the note.
Loans are sold all the time. This is nothing new.
This issue came up over two years ago, and one of the reasons I thought this would get pretty bad. It might be very difficult to come up with the actual documentation. “Everybody knows we own the loan” is not gonna fly. This could be very bad for banks. I wonder, for how many loans the banks simply cannot prove they are the owner of the note.
Or how about them seizing property they don’t even hold a mortgage on?
>>”It was very confusing. How can you foreclose on the note if the note is lost?” Bailey said.<<
How do you redeem a winning lotto ticket if you lost the ticket?
As many “little people” have discovered, if big money is involved, you don’t want to lose paperwork.
We're current on our mortgage but if our current mortgage 'owner' were to try to foreclose on us this is the first trick I'd try.
"Produce a signed copy of the Promissory Note." My mortgage has been sold at least a half a dozen times. For a while I had two separate companies sending me monthly mortgage bills. It took months to get it straightened out.
Is there any way to find out if the original issuer of your mortgage is still in possession of the note?
If so, I could forsee thousands if not millions of people stopping their mortgage payments since the note holder would have no recourse. Is my thinking flawed?
One of the hallmarks of third world countries and banana republics, is that no one can easily come up with clear titles to property. Incomplete documents, lost documents, contested documents, counter claims, incomplete litigation etc etc. It sounds like we are taking another step down the road to becoming exactly like them.
It sounds like we need some “custody” banks to be repositories of documents for loans...sort of like some banks being the registry for certain stocks and their ownership.
It also sounds like some people will end up owning their houses free and clear, but won’t be able to sell them due to a faulty title.
There is something funky going on too.
For some reason for the last 6 months, everytime we have made a payment on our mortgage with Bank of America, someone at their company has swept our deposit out to somewhere.....Put 4,500 in, and the same day someone takes it out.
We have to spend hours providing proof that indeed they have the payment. This involves sending them a payment history with proof of every payment for the last two years that we have to fax.
They won’t allow emails to or from the agent so we end up having this conversation all over again next month.
It is bordering on harrasment.
We didn’t get the load with Bank of America, but our loan was resold to them. Trust me, we are to the point of just trying to get another loan so we can get away from that banking disaster. With our luck though, they would buy that loan too.
Don’t counties also have copies of mortgage notes on file? If the bank lost it, wouldn’t the county the property is in have it?
You know, I’m not saying that the banksters should not be shown to be the shysters they are.
But OTOH, does this mean a whole bunch of people end up getting free houses?
Where in Hades is my free house?
a promissory note is a legally significant document.
you don’t cash photocopies of checks written to someone else, presented by the alleged 20th person to own them.
no original, no standing as plaintiff.
It’s not unreasonable for someone who is demanding payment on a debt to produce documentation that the debt actually exists and that they own the debt. Anytime I get a bill I don’t recongnize I routinely demand verification. There are too many scammers out there not to.
So, they have to show their papers, bitte?............
“Loans are sold all the time. This is nothing new”
Exactly. Lender a originated the loan then sold it to lender B. Lender B kept the note until the payments started coming in late and sold the note in a bundled mortgage security that had 100 other properties in it to lender C. Lender C was on the ropes a year later and was bought by Lender D who was a bigger rival who has since declared bankruptcy and is being sold.
Where is the note and chain of transfer from lender A to lender D?
Ours does.........
You might find this article of interest ...
Note is one document, Mortgage is another. Mortgages not notes are recorded with the county.
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