Is New Law Being Written To Remedy "Lost Notes"?

[Social Apocalypse]

You know, when the title of your car gets lost, you go to DOL, and ask for a new title. You pay a hundred bucks, and they do a title search to check for any liens, you wait, I think 30 days or something, and wa-la, a NEW title is issued, that supersedes any previous claims of ownership on your vehicle. (Unless there is a lien, at which time, the lien holder is then required to produce proof of the lien, and usually they certainly can within hours or MINUTES!).

There are THOUSANDS of homeowners who have successfully challenged their lenders/servicers to produce the note to prove they own their home, and because of sloppy record keeping in the feeding frenzy of securitizing and reselling the note in fragments, multiple times, the actual recorded note is LOST. There is a lot of news about that.

My attorney is probably going to use this strategy on our note at some point soon, but cautions us that she doesn't like to use it on younger folks (we are in our 40's) because tho it works GREAT (she's done it MANY times successfully, and her words are, "oh, those notes are GONE, there's never a note") it leaves your house in "LIMBO". No owner. No note.

While you cannot get foreclosed on because your lender can't PROVE they have the note, NEITHER can you sell, refinance, will, or any other activity using your home... you can't, there is NO NOTE! And so far, there is no way that I have heard of yet for that to be remedied. Am I mistaken? People are living for YEARS without paying a mortgage payment on their home, but they cannot SELL it or refinance it, because the current lender is not going to RELEASE their claim on your note, which would be necessary in such a transaction.

This is why everyone talks about this strategy as a "delay of foreclosure tactic" because that's exactly what it does. Possibly YEARS of delay, but at some point, the ownership of the note, MUST be dealt with. As it stands right now, to my knowledge, (unless that case in San Jose is something new, I haven't heard) no court has given an ultimatum on, "Produce the note in 30 days or it will be voided by the court, and the homeowner will retain ownership of the house". That will be epic, and much needed.

It is my assumption that we need to have new laws that mandate a reasonable process in the event that the note on a home is lost... just like with your car. Otherwise, the house is held hostage, and the homeowner must continue to be a squatter or risk losing it all. They are literally standing on the porch with their shotgun waiting for the next wave of offensive that the lender might come up with to try and foreclose on them. I can tell you, that's no way to live.

Here's what I propose:
If the note has failed to be produced in the court at the request of the borrower, then the judge gives the lender 30 days to produce it. If they CANNOT produce it in 30 days, by law, the note is then recreated in the homeowner's name. Period.

It would unclog the courts, it would give these lenders motivation to actually take care of business properly when transferring notes, and it would be just. I mean, if you can't produce the note that shows ownership on something as valuable as a $300K (or whatever) mortgage in 30 days, then you don't know where it is, obviously. I mean, why do they need longer?? Do they go looking through drawers and under desks, do they check behind sofas, and ask anyone if they have seen it? Come on. They either have it, or they DON'T. Let people get ON with their lives.

What do you think?

[so-cal-gal]

Do you know about corollarys in math?

Well the legal corollary that is ALSO going to be needed is one that puts an end to modification contracts that are never signed by the offering servicer.

Currently, CountryWide is making a mockery of the CW CA AG settlement agreement modification contracts. 'Canceling' or never implementing notartized agreements, never informing the borrower until it suits CW. Normally you have to be more than $10K in arrears before you find out (arrears created by the mod never 'happening').

I propose that if a modification contract has been received ON time, per the restrictions of the offer, and the documents requested are present along with the properly notarized signature, that the law be ammended, REQUIRING the document to be RECORDED by the SERVICER within 5 business days of receipt. Fines and penalties would be added for failure to record.

Why is this needed? I believe CountryWide is the frontrunner in the next scam that will sweep the lending industry with the current practice they are employing with the CA AG Settlement modification contracts. How may other servicing companies are neglecting to sign and notarize the agreements? How many borrowers never got a final copy?

CountryWide is trying to claim that AFTER you have the document notarized that they then do another verification of the income. That is a VERY strange time to do another verification and NOONE is being allowed any input into the process to correct any possible mistakes CW has. These applications were taken VERBALLY, NEVER in WRITING! All they requested from anyone self-employed was bank statements. In addition to not ALLOWING you any visibility into any data that may be incorrect, they INTENTIONALLY hide from you, the borrower, the fact that they have no intention to honor the contract. This situation has existed for as many as 6 months before some of the borrowers were told. THAT IS FRAUD, deceit and deceptive business practices.

Laws must be enacted or modified to END this form of SCAM CW/BofA are now STOOPING to!

I have never even been given the income verification 'story' directly. I have been told that there were 'government funds (TARP?)' that were never linked up properly to my loan. Another time the excuse was that the investor funds never came thru.

Another person was told theirs never got funds from the 'lender'. The AG mods were to have funds ponied up by COUNTRYWIDE as part of the PENALTY for their fraud.

Still another case: CW had a math error (behind the scenes) and could not honor the agreement. The COVER letter mentions "Your eligibility is based upon information you provided to us and my be subject to validation." The CONTRACT makes NO SUCH contingency statement, nor one about any 'funds'. They do not make any attempt to work with you about the validation. I do know that my package had satisfied a 'VERIFICATION' stage. The application process is TOTALLY VERBAL. You NEVER SEE any copy of what THEY put into the file. You are not given any opportunity to rebutt any mistakes or do anything such as show contractual evidience of income.

Sarah Gutierrez with CountryWide is now saying that 'AG mods' can be denied after they are approved (they generate the modification contract, have you get it notarized, in most cases accept as many as 6 payments under it and THEN you find it is denied?). Sarah G. claims that most AG Mods are denied. She claimed they are all contingent upon income. They disapproved mods where income did not change, they disapproved mods where income was slightly improved. (but not improved enough to keep you from qualifying!)

[Social Apocalypse]

Obviously we need lots of new laws to deal with lots of new issues, which arose because of a bunch of people NOT following the law in the first place.

[acesfull]

Hi
I am very much interested in the Produce the Note Defense.

Is there any case law on the books in NJ? Where can I find out if there is case law? Also will the courts not honor the electronic transfer of the note? Do the courts require the original signed note and nothing else?
This is very interesting.

Thank you to all for your input and replys on this subject.

Best regards,

Acesfull

[Catherine]

Hello TB98629.

Thank you so much for this very interesting informative post. It brought a few questions to mind regarding the process of how and why I am where I am today..........months of pure hell trying to get my loan modified before it adjusted to an amount they told me they had my back I will be modified before the adjustment into a payment I could afford which became the biggest lie of all that buried me financially. The common sense of my wanting to keep my home just lower the interest rate of 9% was all I requested turned into the joke was on me for believing they were working with me to achieve that. My story is like many others when they have tried to deal with a loan servicer and for the life of them can't figure out why foreclosure seems to be what they want. That lead me to my last ditch effort to save my home. I filed a Chapter 13 and now awaiting to save the funds to retain an Attorney for I now believe that is my only option left for a modification to keep my home. Sorry for going on and on when I wanted to ask this question. When my NOD showed up there was a long list of names including a certificate series with numbers with Deutsche Bank listed as the investor, HOWEVER when I received my NOS my loan was turned over to Loanstar to finish the foreclosure process. Here is the kicker when I got my NOS Loanstar wasn't even on file with the county. That request came a good week later. How can they sell my home with an auction date when they are not even on file has a trustee until after the fact? Anyway I have the gut feeling my loan was sold off in so many pieces there was no way they could ever modify going through the hoops the servicer has set customers up for in the first place AND when I called the title company and did a OWR I assume the note is no where to be found for the run around that resulted. Now that being said I do not want to tie my house up into limbo for years to come, but if the note is truly lost how can they foreclose, I assume collect their insurance money, buy it back and resell it? Don't they have to have a paper trail to get those steps accomplised? I guess what I am asking is with all the illegally done foreclosures if the homeowner doesn't make an issue out of it like in my state of California being non judicial how about the people coming in to buy them up? If there is no note to be transferred into their name how are the lenders getting around that? Does that mean with all these bad loans out there at some point the new owners of these foreclosures will find out someday they never could have owned that home for the note was lost? Please understand I don't get this stuff at all. It really confuses me, but when I read your post it made me wonder with questions. Hope it okay to ask them. Thank you for letting me come here and say hello. Wishing each of you the best of success stories, Catherine

[Social Apocalypse]

Yes, perhaps we should wonder about what happens when we finally DO pay off these mortgages (if that's even possible). Should we have a "burn the payment coupon party" rather than a "note burning party" since there "is no note"??? I mean, it's really very weird. I can't believe there is no remedy for this situation.

[Paul Molinaro Esq.]

Good point! My firm is seening an increasing number of calls from people who have negotiated a decent loan mod, accepted the terms, signed the forms, paid the initial payment... and then made several monthly payments only to be told 4-5 months later that no modification was done.

The borrower does not have the lender's signature on the agreement!

Yup, more lender shenanigans... all designed to stick it to the borrower.

- Paul

Originally Posted by so-cal-gal

Do you know about corollarys in math?

Well the legal corollary that is ALSO going to be needed is one that puts an end to modification contracts that are never signed by the offering servicer.

Currently, CountryWide is making a mockery of the CW CA AG settlement agreement modification contracts. 'Canceling' or never implementing notartized agreements, never informing the borrower until it suits CW. Normally you have to be more than $10K in arrears before you find out (arrears created by the mod never 'happening').

I propose that if a modification contract has been received ON time, per the restrictions of the offer, and the documents requested are present along with the properly notarized signature, that the law be ammended, REQUIRING the document to be RECORDED by the SERVICER within 5 business days of receipt. Fines and penalties would be added for failure to record.

Why is this needed? I believe CountryWide is the frontrunner in the next scam that will sweep the lending industry with the current practice they are employing with the CA AG Settlement modification contracts. How may other servicing companies are neglecting to sign and notarize the agreements? How many borrowers never got a final copy?

CountryWide is trying to claim that AFTER you have the document notarized that they then do another verification of the income. That is a VERY strange time to do another verification and NOONE is being allowed any input into the process to correct any possible mistakes CW has. These applications were taken VERBALLY, NEVER in WRITING! All they requested from anyone self-employed was bank statements. In addition to not ALLOWING you any visibility into any data that may be incorrect, they INTENTIONALLY hide from you, the borrower, the fact that they have no intention to honor the contract. This situation has existed for as many as 6 months before some of the borrowers were told. THAT IS FRAUD, deceit and deceptive business practices.

Laws must be enacted or modified to END this form of SCAM CW/BofA are now STOOPING to!

I have never even been given the income verification 'story' directly. I have been told that there were 'government funds (TARP?)' that were never linked up properly to my loan. Another time the excuse was that the investor funds never came thru.

Another person was told theirs never got funds from the 'lender'. The AG mods were to have funds ponied up by COUNTRYWIDE as part of the PENALTY for their fraud.

Still another case: CW had a math error (behind the scenes) and could not honor the agreement. The COVER letter mentions "Your eligibility is based upon information you provided to us and my be subject to validation." The CONTRACT makes NO SUCH contingency statement, nor one about any 'funds'. They do not make any attempt to work with you about the validation. I do know that my package had satisfied a 'VERIFICATION' stage. The application process is TOTALLY VERBAL. You NEVER SEE any copy of what THEY put into the file. You are not given any opportunity to rebutt any mistakes or do anything such as show contractual evidience of income.

Sarah Gutierrez with CountryWide is now saying that 'AG mods' can be denied after they are approved (they generate the modification contract, have you get it notarized, in most cases accept as many as 6 payments under it and THEN you find it is denied?). Sarah G. claims that most AG Mods are denied. She claimed they are all contingent upon income. They disapproved mods where income did not change, they disapproved mods where income was slightly improved. (but not improved enough to keep you from qualifying!)

[so-cal-gal]

Originally Posted by Paul Molinaro Esq.

Good point! My firm is seening an increasing number of calls from people who have negotiated a decent loan mod, accepted the terms, signed the forms, paid the initial payment... and then made several monthly payments only to be told 4-5 months later that no modification was done.

The borrower does not have the lender's signature on the agreement!

Yup, more lender shenanigans... all designed to stick it to the borrower.

- Paul

Paul,
Are the ones you are seeing all CountryWide 'AG' mods?

The reason I ask:Workerbees at CW/BofA are now claiming ALL those 'AG mods' were 'contingent' and that MOST have been canceled.

There is one variation of the 'never-signed mod' game: The buttheads transfer the note just as the new payment is to be made (contract supposedly is in force for one full month at this point). They keep claiming the 'paperwork will catch up' and that the other servicer will honor the agreement.

Are there any CW mods that then had the note transferred to Litton in those you have had call in? They did that exact same thing to 2 of us in San Diego.

Employees try to convince borrowers that CW/BofA did nothing wrong. I suspect there are a lot of people who can not afford to fight that have not come forward and others who BELIEVED CW's con!

I also know that CW/BofA SETTLES these when they get the SUIT. NOT BEFORE. THEY PREFER TO RUN UP THE LEGAL BILL FOR THE BORROWERS. Then they settle, requiring a NON-DISCLOSURE, pay off the arrears but not the attornery!

One case in San Diego where the note was transferred to Litton has already resulted in a foreclosure since the guy did not try to fight to have CW and Litton make the contract 'right'.

See my thread under CountryWide. I had Moe give it a sticky.

I PERSONALLY know of SEVEN cases of this from COUNTRYWIDE (including my own). One person here in San Diego made 6 payments during the supposed 7 months the mod SHOULD have been in effect. She KEPT asking for a copy showing their sig. They kept putting her off. She finally asked for a supervisor at the end of Aug. THEN was told oh never occurred, and they had messed with her credit score.

Can you tell me any details like the NUMBER of like cases or should I just have my attorney contact you for anything like that?

Also:I know someone in NEBRASKA (another member of loansafe) who is having trouble finding an attorney for a "CW AG mod that never was" problem. Any chance of a way for them to find an attorney? They have been told to hire one even by the FTC but NE laws are so different, they have been unsuccessful after checking with 5 different attorneys. Good case, just time-consuming and they firms don't want to take it on.

[Paul Molinaro Esq.]

Well... sorry to say... I've gotten calls from frustated borrowers with loans from many different lenders playing this new game. It is not just one lender.

And you have identified the game perfectly.

Scenario 1 - the lender accepts a few payments under the modified agreement then pretends never to have agreed to the loan mod

Scenario 2 - the lender claims that the note was sold just as the modification went through and the new lender was supposed to honor the modification - but new lender pretends it knew nothing of the modification.

I am seeing more of these calls... not as many as people calling who have simply been scammed by loan mod shoppes, but I see a trend starting.

As to the AG cases, not really what I was referring to... the ones I see have nothing to do with the AG settlement cases.

My firm will generally accept these cases on an hourly fee basis to see if we can get the bank to honor its agreements... if that fails then litigation is the next step.

- Paul

Originally Posted by so-cal-gal

Paul,
Are the ones you are seeing all CountryWide 'AG' mods?

The reason I ask:Workerbees at CW/BofA are now claiming ALL those 'AG mods' were 'contingent' and that MOST have been canceled.

There is one variation of the 'never-signed mod' game: The buttheads transfer the note just as the new payment is to be made (contract supposedly is in force for one full month at this point). They keep claiming the 'paperwork will catch up' and that the other servicer will honor the agreement.

Are there any CW mods that then had the note transferred to Litton in those you have had call in? They did that exact same thing to 2 of us in San Diego.

Employees try to convince borrowers that CW/BofA did nothing wrong. I suspect there are a lot of people who can not afford to fight that have not come forward and others who BELIEVED CW's con!

I also know that CW/BofA SETTLES these when they get the SUIT. NOT BEFORE. THEY PREFER TO RUN UP THE LEGAL BILL FOR THE BORROWERS. Then they settle, requiring a NON-DISCLOSURE, pay off the arrears but not the attornery!

One case in San Diego where the note was transferred to Litton has already resulted in a foreclosure since the guy did not try to fight to have CW and Litton make the contract 'right'.

See my thread under CountryWide. I had Moe give it a sticky.

I PERSONALLY know of SEVEN cases of this from COUNTRYWIDE (including my own). One person here in San Diego made 6 payments during the supposed 7 months the mod SHOULD have been in effect. She KEPT asking for a copy showing their sig. They kept putting her off. She finally asked for a supervisor at the end of Aug. THEN was told oh never occurred, and they had messed with her credit score.

Can you tell me any details like the NUMBER of like cases or should I just have my attorney contact you for anything like that?

Also:I know someone in NEBRASKA (another member of loansafe) who is having trouble finding an attorney for a "CW AG mod that never was" problem. Any chance of a way for them to find an attorney? They have been told to hire one even by the FTC but NE laws are so different, they have been unsuccessful after checking with 5 different attorneys. Good case, just time-consuming and they firms don't want to take it on.

[so-cal-gal]

Is there any potential for a class action suit? Some of the people I'm in contact with are asking this.

Also, with the supposed number of 'AG mods' that are just popping out of the woodwork, there needs to be publicity of the fact that this can be litigated successfully. Right now, with the CW cases, they are managing to convince a portion of the prople not to even investigate.

CW also loaned to a segment of the populace that may not have access to good advice or sufficient knowledge of the law to realize they need to pursue this.

Originally Posted by Paul Molinaro Esq.

Well... sorry to say... I've gotten calls from frustated borrowers with loans from many different lenders playing this new game. It is not just one lender.

And you have identified the game perfectly.

Scenario 1 - the lender accepts a few payments under the modified agreement then pretends never to have agreed to the loan mod

Scenario 2 - the lender claims that the note was sold just as the modification went through and the new lender was supposed to honor the modification - but new lender pretends it knew nothing of the modification.

I am seeing more of these calls... not as many as people calling who have simply been scammed by loan mod shoppes, but I see a trend starting.

As to the AG cases, not really what I was referring to... the ones I see have nothing to do with the AG settlement cases.

My firm will generally accept these cases on an hourly fee basis to see if we can get the bank to honor its agreements... if that fails then litigation is the next step.

- Paul