imperfect mortgage documentation can change note to unsecured

[gpatt0n]

Here's a story in the National Law Journal that suggests that, at least in some jurisdictions, the shortcuts taken by those writing mortgages in the boom might come back to bite them.

 

That said, my impression is that mortgagors in Georgia are in a better position because the sale contracts in Georgia are written differently than most other states ... and written in such a way as to streamline the foreclosure process.

 

Still, considering the number of folks impacted by foreclosure and the loss of dreams that entails, the idea that some poor sucker somewhere was able to dodge the bullet fired his direction by the greater world and economy seemed somehow newsworthy.

 

Aw heck, I'll tell you it made me feel about the same as I did when I read about Arkansas' old usury law - Arkansas used to void any contract that called for greater than 10 percent APR under the assumption that no banker, credit card holder or even the devil himself was due to take more than the ten percent we're instructed to give God - and the couple of hundred folks who got new Chevrolet's back in the late 1960's because the dealer financing was greater than 10 percent. That state constitutional usury limit was repealed in the early 1980s.

 

 

Defective paperwork strips mortgage holder of foreclosure rights

 

Sheri Qualters

 

November 18, 2009

 

BOSTON – A Massachusetts federal judge has upheld a bankruptcy court ruling allowing a trustee to treat a mortgage as an unsecured claim, which strips the mortgage holder of foreclosure rights, because of defective mortgage paperwork.

 

...snip...

 

 

The plaintiffs wanted the state high court's take on whether the omission of a borrower's name on an acknowledgement form, which a notary public uses to confirm the identity of the borrower, is a "material defect" that voids the mortgage.

 

...snip

 

The ruling concerned a mortgage held by debtor Mathew Giroux, who filed a voluntary Chapter 7 case in bankruptcy court in Massachusetts on June 27, 2008. The bankruptcy court ... allowed him to treat the mortgage as a unsecured debt.

...snip...

 

Cases about the issue have also cropped up in federal courts in other jurisdictions, said the trustee's lawyer, Jeffrey J. Cymrot of Boston-based Sassoon & Cymrot.

 

"It's largely due to pushing mortgages through the system," Cymrot said. "I don't think it's rare."

 

The case shows that sloppy execution of mortgage documents has consequences in bankruptcy cases, Cymrot said.

 

...snip ...

 

[highcreek]

just as a side note to this Pubby...My father,who manages properties for a group of investors in Raleigh,N.C.,witnessed a judge dismiss a foreclosure with predujice because the mortgage holder could not produce the orignal paperwork. The foreclosure rate is very high there and this homeowners loan had been sold numerous times and original paperwork could not be produced in court by the foreclosing attorney.. The judge was very irate at the sloppiness of the procedings and dismissed their foreclosure case. He also informed the homeowner the procedures to follow to become the legal and sole owner of the property. crazy world..

[D-Dawg]

just as a side note to this Pubby...My father,who manages properties for a group of investors in Raleigh,N.C.,witnessed a judge dismiss a foreclosure with predujice because the mortgage holder could not produce the orignal paperwork. The foreclosure rate is very high there and this homeowners loan had been sold numerous times and original paperwork could not be produced in court by the foreclosing attorney.. The judge was very irate at the sloppiness of the procedings and dismissed their foreclosure case. He also informed the homeowner the procedures to follow to become the legal and sole owner of the property. crazy world..

 

There are court cases like this popping up all over. One recently made it to a state's highest court which basically ruled that 60 million mortgages could not be foreclosed on because the "note" holder did not own the "deed" to the property. That in order to foreclose, both must be controlled by the same person/group/company.

[lotstodo]

just as a side note to this Pubby...My father,who manages properties for a group of investors in Raleigh,N.C.,witnessed a judge dismiss a foreclosure with predujice because the mortgage holder could not produce the orignal paperwork. The foreclosure rate is very high there and this homeowners loan had been sold numerous times and original paperwork could not be produced in court by the foreclosing attorney.. The judge was very irate at the sloppiness of the procedings and dismissed their foreclosure case. He also informed the homeowner the procedures to follow to become the legal and sole owner of the property. crazy world..

That is being upheld all over the country. In some cases a mortgage has been sold so many times that there are not even copies of signed forms. Judges all over have said that at the very least a mortgage company must show the court that they are the rightful owners of the mortgage by producing the paperwork not only from the originator but produce a paper trail to prove the transfer of the rights. A lot of mortgage companies are being caught with their pants down.