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What does a Corporate Assignment of a Mortgage mean? Please read details and help me understand this letter my friend got.

Maywood, IL |

Assignor- MERS as nomiee for fremont investment & loan it's successors and assigns Assignee-Deutsche Bank as trustee. Sufficency of which is hereby acknowledged the said assignor hereby assigns unto the assignee the said mortgage having an original principal sum of $163,200.00 with interest secured thereby, with all moneys now owing or that may hereafter become due or owing in respect thereof, and the full benefit of all the powers and of all the covenants and provisos therein contained and the said assignor hereby grants and conveys unto the said assignee, the assignor's beneficial interest under the mortgage to have and to hold the said mortgage and the said property unto the said assignee forever, subject to the terms contained in the mortgage.

Attorney Answers 3


There are lots of issues here. Apparently Freemont is the original lender and the mortgage nominated MERS as the lender's representative. The mortgage was securitized, ultimately ending up with Deutsche Bank as a trustee for investors. Once foreclosure became imminent, the system had to get the right to foreclose lined up with the entity who planned to do so, hence the corporate assignment you speak of. What it means in essence, is the property can now be foreclosed upon. Subtle issues need the attention of an attorney. Did Freemont, now in bankruptcy, really transfer the mortgage, or did an attorney for Deutsche Bank do it under some apparent authority from the MERS corporation. These are sophisticated issues that need to be addressed by an attorney familiar with these issues.

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Deutsche Bank now has the legal power to foreclose on the property if it is in default. MERS is Mortgage Electronic Registration Systems. It is used by lenders to register and hold trust deeds in own name until foreclosure is needed.

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 licensed to practice law only in the State of California. Responses are based solely on California law unless stated otherwise.

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Without looking at the entire document, it appears that Fremont Investment & Loan is the original lender and the mortgage nominated MERS as the lender's representative. The mortgage was likely securitized into a private-lable mortgage security trust (MBS) with Deutsche Bank named as a trustee for investors.

Most of these Assignment of Mortgage while on the surface appear to give Plaintiff banks the right to foreclose, savvy homeowners are challenging the big Wall Street banks to prove they have "proper standing" to pursue the foreclosure action especially if the endorsements that appear on the bottom of their promissory note does NOT conform to the strict requirement of the Trust's PSA.

I recently had a federal foreclosure case dismissed by Judge Pallmeyer on October 11, 2011. As a nationally recognized leader in Mortgage Foreclosure Defense Education & Litigation, our firm successfully defeated Plaintiff's Complaint by filing A Motion to Dismiss for Lack of Standing. See Deutsche Bank v. Bodzianowski (11 cv 1950)

Judge Pallmeyer ruled that Deutsche, a major Wall Street bank, lacked standing to foreclosure on an Illinois homeowner. Standing is the threshold question in every federal case. Plaintiff was NOT the original lender and sought to establish standing by endorsing the Promissory Note and assigning the Mortgage directly to the Trustee . While Plaintiff pled that it was the legal holder of the Note and Mortgage, it failed to convey the mortgage file according to the terms creating the Trust (Pooling and Servicing Agreement - PSA) and New York trust law. A Promissory Note is an asset of the trust and should have an "unbroken" chain of endorsements from the Originator (original lender) to Sponsor to Seller to Depositor and then to the Trustee, sequentially. In other words, the act of the Trustee receiving an instrument that does not have ALL of the intervening endorsements is void. Although Plaintiff argued that it has standing because the Promissory Note, a negotiable instrument, is governed by the Uniform Commercial. However, the UCC permits parties to agree to a more exacting method of transferring the notes to the trust and in this case the parties did so inside the private-label mortgage-backed security (MBS) trust.

As such, we are encouraging all Illinois homeowners to check to see if their loan was securitized in a private-label MBS anytime between 2003 - 2007. If you do not know the answer to this question, we would be happy to help.

The information presented here is general in nature and is not intended, nor should be construed, as legal advice. This posting does not create any attorney-client relationship with the author. For specific advice about your particular situation, consult your own attorney.

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Can a business owner assign a commercial mortgage to another corporation? If the trustee has a modified agreement.

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