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My refi was with a wholesale lender - the funder sold the loan to a bank, who has legal interest here?

Chicago, IL |

The mortgage and note are made out to the wharehouse lender's name - except it says MERS is mortgagee - which contradicts my h/o ins policy which must read the lender as mortgagee. I found out the lender is not the funder. Funder is never mentioned anywhere in docs. The lender transfers servicing to a bank, the bank then says it is the mortgagee and an affidavit of assignment from MERS to the bank is recorded. The bank's subsidiary is the servicer on the loan. The bank's subsidiary says that MERS is still the mortgagee, but that Fannie Mae owns the note. Title company says that the funder (a sister co of the lender) sold the note to the bank at closing, and the bank sold it to Fannie Mae (no sec reporting), who securitized and kept bank subsidiary as servicer.
Who can foreclose?

Attorney Answers 2

Posted

The party that is owed the money is the party that can foreclose under the promissory note if the default is failure to pay on the note. If the default is something else, then it could be the mortgagee too.

Take your closing package with any monthly statements, coupon books and notices and correspondence from them (any of them) all to an attorney. Because I suspect your real question is who do you talk to about a loan modification.

The response given is not intended to create, nor does it create an ongoing duty to respond to questions. The response does not form an attorney-client relationship, nor is it intended to be anything other than the educated opinion of the author. It should not be relied upon as legal advice. The response given is based upon the limited facts provided by the person asking the question. To the extent additional or different facts exist, the response might possibly change. Attorney is currently licensed to practice law only in the State of Illinois. Responses are based solely on Illinois law unless stated otherwise.

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5 comments

Asker

Posted

No - I don't want a mod, I needed to sell the house. I don't know who I might owe money to under a fraudulently-induced and under-disclosed refinance loan, and no one will tell me. I have damages in excess of the "loan" amount. I am not in default as TILA provides that I am not liable to pay any amount until the creditor takes required rscission action with 20 days of my notice to rescind (which it did not), and the owner of the note has never sent me a default notice. Already brought my loan package to several attorneys - this is a complex case, apparently not eligible for contingency and retainers beyond our ability, plus not eligible for class action in Illinois. We are not eligible for low-cost attorney (and I haven't found even one that takes complex cases), denied appointed counsel because of our gross income, which we never see because 1/3 goes to tax. Pro se for over 2 years in this case - very difficult for me, not fair that they can get away with this.

Asker

Posted

And true party (who owns the note and right to be repaid for the debt) is still being concealed. At this point, the only lead I have is that my loan is a Fannie Mae. But, Fannie Mae is not foreclosing, and has not responded to any of my letters. Plus, both the "lender" and the servicer are reporting the debt as delinquent on my credit reports, and telling me there's nothing I can do about it because they are not subject to FDCPA - do you think maybe the credit reporting agencies may be breaking the law, since the CRA's are reverifying both even after I dispute the information as incorrect?

Stephen Samuel Messutta

Stephen Samuel Messutta

Posted

Fannie Mae is not a lender. You should contact the people who originated the lain with you and see if they know who bought it bit by now it could have even been resold!!! And if your mortgage was deeded to "MERS" then you would probably have to contact them. Eve the loan servicing agent may not know at this point!!

Asker

Posted

Hi, MERS, the closing "originating" lender, the servicer, and the loan broker (who I found out later was an employee of the closing lender) are all defendants in my case. None of them will tell me who owns the loan. The servicer (who is still attempting to foreclose as a holder in Cook County court) admitted in Federal court that it is a mere servicer and not beneficial owner or holder. My case is over 2 years old, and I found out that last year the servicer received payments on the account which exceed the original loan amount, but no one will tell me who made the payment. The originating lender account is now on my credit report again as "delinquent, defaulted, in foreclosure", and so is the servicer account, with the same loan. There are 4 different account numbers associated with our "borrower and lender" transaction, which I haven't been able to resolve with that lender - it basically changed offices without notifying me within a week after closing and the "broker" went out of business a week before closing. I simply couldn't get any answers, and the servicer came into the picture by surprise a month later - and it kept telling me that it has no answers because it had nothing to do with the "transaction".and does not have docs from the closing - which was not true, I later found. Stuff was missing, and there were 2 different HUD1's which we signed at closing but didn't realize till we got home and were able to look through the docs. The closing was 15 minutes, "our broker" had to leave because he wanted to visit his son in the hospital - we also had a son in the hospital, and we believed this guy when he said we could call him after we look through the docs. These are some reasons why I sent rescission notice in 2008, after trying as hard as I could to resolve the problems. And, in Fed court, the attorney for MERS/servicer has prohibited me from sending written requests, not only to his clients (MERS and the servicer), but also to anyone affiliated with MERS. I don't want sanctions, and I can't seem to find out if contacting these non-parties is against the rules, even if we don't have proof of them being represented by this lawyer. And, maybe the servicer (nor originator)does not know who now owns the loan, but servicer received payment on the account in full from "someone" - and servicer says MERS is still mortgagee (although MERS "assigned" to servicer a month after foreclosure filing), so I just don't get why the Cook County judge is allowing the foreclosure case to proceed. And, now the originator is again reporting the first account to CRA's. I have a suspicion that the originator (or sis co) was forced to a buyback due to fraud. But, I don't know how to find out, especially since no one will answer my inquiries. Throwing a different wrench into the mix, I just recently found out that the "funder" was Lasalle Bank - so the sister co of the originator must be the conduit - but that could mean that the sister co sold the loan, but to who? Which would also make every "true copy" of the note I have, not a true copy, I guess, since there must be a 5th copy with endorsement from Lasalle or the sis co. I'm sorry for bothering you so much - just letting you know what I found, maybe it could help you, too? Thanks again.

Stephen Samuel Messutta

Stephen Samuel Messutta

Posted

You need to get an attorney involved if you don't already have one. MERS is being slammed all over. I am an inactive member of the Florida Bar in addition to my active Illinois licensing, and I get a publication called the Florida Bar News. This month's edition has a full article on MERS and the fact that so many loans were being made that shortcuts were taken and the system, which was originally intended to expedite trading in mortgage loans, seems to be in a shambles. No lender should be able to foreclose without producing the debt instrument and security (note and mortgage). There are even allegations of fraud involved -- "robosignatures" of documents that were flawed but people were simply given some kind of authority to sign on behalf of those who did have the authority to sign, and did so without fully reviewing documents. As a result there seems to be a fair amount of information that would be beneficial to your situation but without proper representation it seems that even the courts are not sure what to do. Stephen S. Messutta Attorney at Law 1043 Manor Drive Wilmette, IL 60091 T.847.606.2782 @: Messuttalaw@aol.com "When you build a new house, make a parapet for your roof, so that you do not bring bloodguilt on your household if anyone should fall off." Benton v. City of S. Louis, 248 Mo. 98, 154 S.W. 474 (1913) and Sakellaridis v. Polar Air Cargo, 104 F.Supp.2nd 160 (2000), citing Deuteronomy 22:8.

Posted

Whoever holds the Note and Mortgage is entitled to file the foreclosure. It would entail a long legal discussion to explain how a party might get the Note and Mortgage and what defenses might prevail if the assignment to the party who sues did not get the assignment. There is no way for me to answer this in the space allotted by Avvo. Be aware that although lenders - and their attorneys - DO make mistakes in assigning mortgages, it is difficult to mount a defense on the basis of who received an assignment of the Note and Mortgage.

This answer does not constitute legal advice and does not and is not intended to create an attorney-client relationship. The law may vary depending on the state in which you reside. It is intended only to give some direction in which to seek assistance.

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2 comments

Asker

Posted

Hi - thanks. The mortgage and note are not available in thier original form, but I have 4 different "true copies" given to me by the servicer (2 different within 1 year), the title company, and the lender. Plus, I have my copy from closing. Supposedly, servicer has the original note and the originating lender has the original mortgage (physical possession claimed by MERS on behalf of lender). Recently, the MERS website now lists my loan as "active" with Fannia Mae as "investor" , after it was previously listed as "inactive" for at least 2 years. There was no mistake made here, it was fraud from the beginning, but we can't afford attorney and are not eligible for free or reduced. Complex case. My pro se case is over 2 years old and very difficult for me.

Asker

Posted

And, the affidavit of "assignment" was no mistake - it was made solely to facilitate the foreclosure of our home by the wrong party. And, in spite of all my certified mail requests, the servicer still will not disclose the true party.

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