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

Asked about 4 years ago - 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)

  1. Stephen Samuel Messutta

    Contributor Level 16
    Best Answer
    chosen by asker

    Answered . 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.

  2. Erica Crohn Minchella

    Contributor Level 14

    Answered . 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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