Ask for proff

[jeb]

(Well, proof, anyway!

An interesting wrinkle had been added to the foreclosure process.

When someone goes to a court they must prove that THEY are the ones to whom the debt is owed.

With the manner in which a lender has taken a loan from a buyer and then sells the loan to another party - the normal process - and then that party sells all or a part of the loan to others and THEY, in turn, sell to . . . well, you get the picture.

What this all means is that the original loan may have been broken into a dozen parts before this is all over and NO ONE can come up with the paperwork to prove that they are the ones owed the money.

If they can't prove THEY are owed the money, they have no standing to foreclose. - jb

[HHM]

In theory, this "may" work. It really depends on what state you are in, the nature of the foreclosure process, and what is required to be recorded. The recorded document (the mortgage, deed fo truste, etc) is typically all that is required to "prove" the loan. The issue you raise is whether the agent that is actually performing the foreclosure has the right to do so, but they don't necessarily need the original loan documents to do that.

[justbroke]

There's a great article on Bankruptcy Law Network which is specific to California. It is true that is some States, the person who brings on the foreclosure action, must have standing (e.g. be party of interest).

Mortgage Electronic Registration Services (MERS), which records most loans these days, was challenged in Florida, and lost on at least one occasion, for bringing forth a foreclosure action.

[jeb]

It's going to be interesting to watch -

It is sort of like BofA making a loan and me going into court and filing foreclosure on the buyer - unless I can prove the note is now owed to me, do I have standing?

With the way these loans have been chopped up - 1000's grouped into one bunch and then parts of that group sold to different entities, who, in fact, is now entitled to say, "You owe me money." and how much? - jb

[freshstartfl]

All the bank needs to show is an Assignment of Mortgage. When those aren't available, in Florida we send with the FSJ packet a Plaintiff's Memorandum of Law/No Assignment Needed. It's case law showing that it isn't necessary. Some Judges want to see either one of these, and some Judges don't.

[HHM]

Also, for the sake of other readers, I do need to take issue with your analogy that the loan is being chopped up in a dozen pieces, that is not really an accurate way to describe how mortgage securitization works.

Yes, mortgages are bundled, and an asset backed security (think of security in this context like a stock or bond) is sold to an investor, usually a large fund of some kind. The owner of the mortgage is now the investor. But the "bundled mortgages" stay with the security instrument. The underlying mortgages are actually quite traceable, but because these are proprietary investments, the general public and regulators don't have ready access to them. From the borrowers perspective, Adam and Eve homebuyer, they are never aware of this; most likely, the same bank where they went to get the loan is still servicing the loan.

[jeb]

H, agree that what you say is the way it use to work - but when the hedge funds and the other "inventive" ways of buying and selling mortgages came into the picture things have gotten very fuzzy. They buy and sell a part of a bundle - sometimes a dozen times - and trying to back everything out to see who, in fact, owns any particular mortgage has become all but impossible with some of them.

I believe this concept of "prove it" stated with a US Rep. - in Michigan, I think - and it seems it is on track to a high court to determine what the outcome will be. - jb